<SEC-DOCUMENT>0001144204-13-068186.txt : 20131219
<SEC-HEADER>0001144204-13-068186.hdr.sgml : 20131219
<ACCEPTANCE-DATETIME>20131219162036
ACCESSION NUMBER:		0001144204-13-068186
CONFORMED SUBMISSION TYPE:	F-3/A
PUBLIC DOCUMENT COUNT:		10
FILED AS OF DATE:		20131219
DATE AS OF CHANGE:		20131219

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			MAGIC SOFTWARE ENTERPRISES LTD
		CENTRAL INDEX KEY:			0000876779
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-PREPACKAGED SOFTWARE [7372]
		IRS NUMBER:				330477418
		STATE OF INCORPORATION:			L3
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		F-3/A
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-192241
		FILM NUMBER:		131288530

	BUSINESS ADDRESS:	
		STREET 1:		5 HAPLADA STREET
		CITY:			OR YEHUDA ISRAEL
		STATE:			L3
		ZIP:			60218
		BUSINESS PHONE:		97235389322

	MAIL ADDRESS:	
		STREET 1:		5 HAPLADA STREET
		CITY:			OR YEHUDA ISRAEL
		STATE:			L3
		ZIP:			60218
</SEC-HEADER>
<DOCUMENT>
<TYPE>F-3/A
<SEQUENCE>1
<FILENAME>v363364_f3a.htm
<DESCRIPTION>FORM F-3/A
<TEXT>
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<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B> Registration&nbsp;No.&nbsp;333-192241 </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B> As filed with the Securities and
Exchange Commission on December 19, 2013 </B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 18pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>UNITED STATES</B></P>

<P STYLE="font: 18pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Washington, D.C. 20549</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P> <P STYLE="font: 18pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B> FORM
                                         F-3/A </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B> Amendment No.
1 </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>REGISTRATION STATEMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>UNDER</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>THE SECURITIES ACT OF 1933</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P> <P STYLE="font: 18pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>MAGIC SOFTWARE ENTERPRISES LTD.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">(Exact name of registrant
as specified in its charter)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
    <TD STYLE="width: 49%; padding-right: 0.05in; padding-left: 0.05in; text-align: center"><b>Israel</b></td>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 49%; padding-right: 0.05in; padding-left: 0.05in; text-align: center"><b>Not Applicable</b></td></tr>
<tr style="vertical-align: bottom">
    <TD STYLE="padding-right: 0.05in; padding-left: 0.05in; text-align: center"><font style="font-size: 10pt">(State or other jurisdiction of</font></td>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 0.05in; padding-left: 0.05in; text-align: center"><font style="font-size: 10pt">(I.R.S. Employer</font></td></tr>
<tr style="vertical-align: bottom">
    <TD STYLE="padding-right: 0.05in; padding-left: 0.05in; text-align: center"><font style="font-size: 10pt">incorporation or organization)</font></td>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 0.05in; padding-left: 0.05in; text-align: center"><font style="font-size: 10pt">Identification No.)</font></td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>5 Haplada Street,</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Or Yehuda 60218, Israel</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Tel: +972 (3) 538 9322</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">(Address, including zip code, and telephone
number, including area code, of registrant's principal executive offices)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B> Magic Software Enterprises Inc. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B> Attn: Regev Yativ, President </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B> 24422 Avenida de la Carlota, Suite
#365 </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B> Laguna Hills, CA 92653 </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">(Name, address, including zip code, and
telephone number, including area code, of agent for service)</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><I>Copies of all communications, including
communications sent to agent for service, should be sent to:</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="width: 49%; padding-right: 4.5pt; padding-left: 4.5pt; text-align: center"><b>Amit Birk Adv.</b></td>
    <TD STYLE="width: 2%; padding-right: 4.5pt; padding-left: 4.5pt; text-align: center">&nbsp;</td>
    <TD STYLE="width: 49%; padding-right: 4.5pt; padding-left: 4.5pt; text-align: center"><b>Steven J. Glusband, Esq.</b></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-right: 4.5pt; padding-left: 4.5pt; text-align: center"><b>Magic Software Enterprises Ltd.</b></td>
    <TD STYLE="padding-right: 4.5pt; padding-left: 4.5pt; text-align: center">&nbsp;</td>
    <TD STYLE="padding-right: 4.5pt; padding-left: 4.5pt; text-align: center"><b>Carter Ledyard &amp; Milburn LLP</b></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-right: 4.5pt; padding-left: 4.5pt; text-align: center"><b>5 Haplada Street</b></td>
    <TD STYLE="padding-right: 4.5pt; padding-left: 4.5pt; text-align: center">&nbsp;</td>
    <TD STYLE="padding-right: 4.5pt; padding-left: 4.5pt; text-align: center"><b>2 Wall Street</b></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-right: 4.5pt; padding-left: 4.5pt; text-align: center"><b>Or-Yehuda, 60218, Israel</b></td>
    <TD STYLE="padding-right: 4.5pt; padding-left: 4.5pt; text-align: center">&nbsp;</td>
    <TD STYLE="padding-right: 4.5pt; padding-left: 4.5pt; text-align: center"><b>New York, NY 10005</b></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-right: 4.5pt; padding-left: 4.5pt; text-align: center"><b>972-3-538-9322</b></td>
    <TD STYLE="padding-right: 4.5pt; padding-left: 4.5pt; text-align: center">&nbsp;</td>
    <TD STYLE="padding-right: 4.5pt; padding-left: 4.5pt; text-align: center"><b>Tel: 212-238-8605</b></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="padding-right: 4.5pt; padding-left: 4.5pt; text-align: center">&nbsp;</td>
    <TD STYLE="padding-right: 4.5pt; padding-left: 4.5pt; text-align: center">&nbsp;</td>
    <TD STYLE="padding-right: 4.5pt; padding-left: 4.5pt; text-align: center"><b>Fax: 212-732-3232</b></td></tr>
</table> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B>Approximate date of commencement of proposed
sale to the public:</B> From time to time after the effective date of this Registration Statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>

<!-- Field: Rule-Page --><DIV ALIGN="CENTER" STYLE="margin-top: 0; margin-bottom: 0"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 25%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font-size: 10pt"><B>If the
only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check
the following box.</B> </FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font-size: 10pt"><B>If any
of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule&nbsp;415 under
the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check
the following box.</B> </FONT><FONT STYLE="font-family: Wingdings">x</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font-size: 10pt"><B>If this
Form is filed to register additional securities for an offering pursuant to Rule&nbsp;462(b) under the Securities Act, please check
the following box and list the Securities Act registration statement number of the earlier effective registration statement for
the same offering.</B> </FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font-size: 10pt"><B>If this
Form is a post-effective amendment filed pursuant to Rule&nbsp;462(c) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier effective registration statement for the same offering.</B> </FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font-size: 10pt"><B>If this
Form is a registration statement pursuant to General Instruction I.C. or a post-effective amendment thereto that shall become effective
upon filing with the Commission pursuant to Rule&nbsp;462(e) under the Securities Act, check the following box.</B> </FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font-size: 10pt"><B>If this
Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional
securities or additional classes of securities pursuant to Rule&nbsp;413(b) under the Securities Act, check the following box.</B>
</FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>CALCULATION OF REGISTRATION FEE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Title&nbsp;of&nbsp;each&nbsp;class&nbsp;of
    <BR>securities&nbsp;to&nbsp;be&nbsp;registered </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Amount&nbsp;to <BR>be&nbsp;Registered(1) </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Proposed&nbsp;maximum
    <BR>offering&nbsp;price <BR>per&nbsp;unit(1) </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Proposed&nbsp;maximum
    <BR>aggregate <BR>offering&nbsp;price(1)(2)(3) </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Amount&nbsp;of <BR>registration&nbsp;fee </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 40%; text-indent: -0.1in; padding-left: 0.1in"> Ordinary shares, par value NIS 0.1 per share </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD><TD NOWRAP STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in"> Warrants </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD NOWRAP STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in"> Debt Securities </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD NOWRAP STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in"> Subscription Rights to Purchase Ordinary Shares </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD NOWRAP STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.1in"> Units </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 0.1in"> Total </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> $ </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 60,000,000 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> $ </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 10pt"> 7,728.00 </FONT></TD><TD NOWRAP STYLE="padding-bottom: 2.5pt; text-align: left"> (4)* </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left">(1)</TD><TD STYLE="text-align: justify">Not specified as to each class of securities to be registered
pursuant to General Instruction II.C. of Form F-3.</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in">(2)</TD><TD>The registrant is hereby registering an indeterminate number of ordinary shares, warrants, debt securities and subscription
rights of the registrant as may from time to time be offered at unspecified prices. The registrant has estimated the proposed maximum
aggregate offering price solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities
Act of 1933. Securities registered hereunder may be sold separately, together or as units with other securities registered hereunder.
The securities registered hereunder include securities that may be purchased by underwriters to cover over-allotments, if any.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in">(3)</TD><TD>The registrant is hereby registering (i) with respect to warrants, such an indeterminate number of ordinary shares and debt
securities (A) as may be issuable or deliverable upon exercise of warrants, and (B) as may be required for delivery upon exercise
of warrants as a result of anti-dilution provisions, (ii) with respect to debt securities, such an unspecified amount of ordinary
shares (A) as may be issuable or deliverable upon the exercise or conversion of debt securities, and (B) as may be required for
delivery upon exercise or conversion of debt securities as a result of anti-dilution provisions, up to a proposed aggregate offering
price of $60,000,000; and, with respect to subscription rights, such an indeterminate number of ordinary shares (A) as may be issuable
or deliverable upon exercise of the subscription rights, and (B) as may be required for delivery upon exercise of subscription
rights as a result of anti-dilution provisions.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(4)</TD><TD>Calculated pursuant to Rule 457(o) under the Securities Act of 1933.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in"> * </TD><TD> The registration fee was paid at the time of the original filing
                                         of the Registration Statement on November 8, 2013. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B>The
registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until
the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become
effective in accordance with Section 8(a) of the securities Act of 1933 or until the Registration Statement shall become effective
on such date as the Commission, acting pursuant to said Section 8(a), may determine.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: red">The information contained in
this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement
filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it
is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: red">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: red"> Subject to Completion, Dated
December 19, 2013 </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: red">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>PROSPECTUS</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
    <TD STYLE="width: 15%">&nbsp;</td>
    <TD STYLE="font-size: 12pt; text-align: center; width: 70%"><font style="font-size: 12pt"><b>MAGIC SOFTWARE ENTERPRISES LTD.</b></font></td>
    <TD STYLE="width: 15%">&nbsp;</td></tr>
<tr style="vertical-align: bottom">
    <TD>&nbsp;</td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD>&nbsp;</td></tr>
<tr style="vertical-align: bottom">
    <TD>&nbsp;</td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD>&nbsp;</td></tr>
<tr style="vertical-align: bottom">
    <TD>&nbsp;</td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD>&nbsp;</td></tr>
<tr style="vertical-align: bottom">
    <TD>&nbsp;</td>
    <TD STYLE="text-align: center"><IMG SRC="tlogo.jpg" ALT=""></td>
    <TD>&nbsp;</td></tr>
<tr style="vertical-align: bottom">
    <TD>&nbsp;</td>
    <TD STYLE="text-align: center">&nbsp;</td>
    <TD>&nbsp;</td></tr>
<tr style="vertical-align: bottom">
    <TD>&nbsp;</td>
    <TD STYLE="text-align: center"><font style="font-size: 10pt"><b>$60,000,000</b></font></td>
    <TD>&nbsp;</td></tr>
<tr style="vertical-align: bottom">
    <TD>&nbsp;</td>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt"><B>O<FONT STYLE="font-family: Times New Roman, Times, Serif">rdinary
    Shares</FONT></B></FONT></td>
    <TD>&nbsp;</td></tr>
<tr style="vertical-align: bottom">
    <TD>&nbsp;</td>
    <TD STYLE="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Subscription Rights</b></font></td>
    <TD>&nbsp;</td></tr>
<tr style="vertical-align: bottom">
    <TD>&nbsp;</td>
    <TD STYLE="text-align: center"><font style="font-size: 10pt"><b>Warrants</b></font></td>
    <TD>&nbsp;</td></tr>
<tr style="vertical-align: bottom">
    <TD>&nbsp;</td>
    <TD STYLE="text-align: center"><font style="font-size: 10pt"><b>Debt Securities</b></font></td>
    <TD>&nbsp;</td></tr>
<tr style="vertical-align: bottom">
    <TD>&nbsp;</td>
    <TD STYLE="text-align: center"><font style="font-size: 10pt"><b>Units</b></font></td>
    <TD>&nbsp;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We may offer to the public from time to
time in one or more series or issuances:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>ordinary shares;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>subscription rights to purchase ordinary shares;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>warrants to purchase ordinary shares or debt securities;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>debt securities consisting of debentures, notes or other evidences of indebtedness; or</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>units consisting of any of the forgoing securities.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We refer to the ordinary shares, warrants
and debt securities collectively as &ldquo;securities&rdquo; in this prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> Our ordinary shares are listed on the
NASDAQ Global Select Market and on the Tel Aviv Stock Exchange under the symbol &ldquo;MGIC.&rdquo; On December 18, 2013, the
last reported sale price of an ordinary share of our company on the NASDAQ Global Select Market was $6.90. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The securities will have a total public offering price not to
exceed $60,000,000. This prospectus provides a general description of the securities we may offer. Each time we sell securities,
we will provide specific terms of the securities offered in a supplement to this prospectus. The prospectus supplement may also
add, update, or change information contained in this prospectus. This prospectus may not be used to consummate a sale of securities
unless accompanied by the applicable prospectus supplement. You should read both this prospectus and any prospectus supplement
together with additional information described under the heading &ldquo;Where You Can Find More Information&rdquo; and the documents
incorporated or deemed to be incorporated by reference carefully before you make your investment decision.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We will sell these securities directly to our shareholders or
to purchasers or through agents on our behalf or through underwriters or dealers as designated from time to time. If any agents
or underwriters are involved in the sale of any of these securities, the applicable prospectus supplement will provide the names
of the agents or underwriters and any applicable fees, commissions, or discounts. The prospectus supplement for each offering of
securities will describe in detail the plan of distribution for that offering. For general information about the distribution of
securities offered, please see &ldquo;<I>Plan of Distribution</I>&rdquo; in this prospectus on page 15.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Investing in these securities involves certain risks. Please
carefully consider the &ldquo;Risk Factors&rdquo; in Item 3(D) of our most recent Annual Report on Form 20-F incorporated by reference
in this prospectus, the &ldquo;Risk Factors&rdquo; beginning on page 3 of this prospectus, and in any applicable prospectus supplement,
for a discussion of the factors you should consider carefully before deciding to purchase these securities.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">None of the Securities and Exchange Commission, the Israeli
Securities Authority or any state securities commission has approved or disapproved of the securities being offered by this prospectus,
or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> The date of this prospectus is December
[&nbsp;&nbsp;&nbsp;&nbsp;], 2013. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>TABLE OF CONTENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: center; border-bottom: Black 1pt solid"><B> Page </B></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <td> SUMMARY </td>
    <TD> &nbsp; </TD>
    <td style="text-align: center"> 2 </td></tr>
<TR STYLE="vertical-align: bottom; background-color: White">
    <td> RISK FACTORS </td>
    <TD> &nbsp; </TD>
    <td style="text-align: center"> 3 </td></tr>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <td> FORWARD-LOOKING STATEMENTS </td>
    <TD> &nbsp; </TD>
    <td style="text-align: center"> 13 </td></tr>
<TR STYLE="vertical-align: bottom; background-color: White">
    <td> RATIO OF EARNINGS TO FIXED CHARGES </td>
    <TD> &nbsp; </TD>
    <td style="text-align: center"> 14 </td></tr>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <td> CAPITALIZATION AND INDEBTEDNESS </td>
    <TD> &nbsp; </TD>
    <td style="text-align: center"> 14 </td></tr>
<TR STYLE="vertical-align: bottom; background-color: White">
    <td> MARKET FOR OUR ORDINARY SHARES </td>
    <TD> &nbsp; </TD>
    <td style="text-align: center"> 14 </td></tr>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <td> USE OF PROCEEDS </td>
    <TD> &nbsp; </TD>
    <td style="text-align: center"> 15 </td></tr>
<TR STYLE="vertical-align: bottom; background-color: White">
    <td> PLAN OF DISTRIBUTION </td>
    <TD> &nbsp; </TD>
    <td style="text-align: center"> 15 </td></tr>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <td> DESCRIPTION OF ORDINARY SHARES </td>
    <TD> &nbsp; </TD>
    <td style="text-align: center"> 17 </td></tr>
<TR STYLE="vertical-align: bottom; background-color: White">
    <td> DESCRIPTION OF SUBSCRIPTION RIGHTS </td>
    <TD> &nbsp; </TD>
    <td style="text-align: center"> 19 </td></tr>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <td> DESCRIPTION OF WARRANTS </td>
    <TD> &nbsp; </TD>
    <td style="text-align: center"> 20 </td></tr>
<TR STYLE="vertical-align: bottom; background-color: White">
    <td> DESCRIPTION OF DEBT SECURITIES </td>
    <TD> &nbsp; </TD>
    <td style="text-align: center"> 21 </td></tr>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <td> DESCRIPTION OF UNITS </td>
    <TD> &nbsp; </TD>
    <td style="text-align: center"> 22 </td></tr>
<TR STYLE="vertical-align: bottom; background-color: White">
    <td> FOREIGN EXCHANGE CONTROLS AND OTHER LIMITATIONS </td>
    <TD> &nbsp; </TD>
    <td style="text-align: center"> 23 </td></tr>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <td> AUTHORIZED REPRESENTATIVE </td>
    <TD> &nbsp; </TD>
    <td style="text-align: center"> 23 </td></tr>
<TR STYLE="vertical-align: bottom; background-color: White">
    <td> OFFERING EXPENSES </td>
    <TD> &nbsp; </TD>
    <td style="text-align: center"> 23 </td></tr>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <td> LEGAL MATTERS </td>
    <TD> &nbsp; </TD>
    <td style="text-align: center"> 23 </td></tr>
<TR STYLE="vertical-align: bottom; background-color: White">
    <td> EXPERTS </td>
    <TD> &nbsp; </TD>
    <td style="text-align: center"> 23 </td></tr>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <td> WHERE YOU CAN FIND MORE INFORMATION </td>
    <TD> &nbsp; </TD>
    <td style="text-align: center"> 24 </td></tr>
<TR STYLE="vertical-align: top; background-color: White">
    <td> INCORPORATION OF CERTAIN INFORMATION BY REFERENCE </td>
    <TD> &nbsp; </TD>
    <td style="text-align: center"> 24 </td></tr>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <td> ENFORCEABILITY OF CIVIL LIABILITIES </td>
    <TD> &nbsp; </TD>
    <td style="text-align: center"> 25 </td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B>You should rely only on the information
contained or incorporated by reference in this prospectus. We have not authorized any other person to provide you with different
information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not making an
offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information
appearing in this prospectus is accurate only as of the date on the front cover of this prospectus. Our business, financial condition,
results of operation and prospects may have changed since that date.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In this prospectus, the terms &ldquo;we&rdquo;, &ldquo;us&rdquo;,
&ldquo;Magic&rdquo; and &ldquo;our&rdquo; mean Magic Software Enterprises Ltd. and its subsidiaries, unless otherwise indicated.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">All references to &ldquo;dollars&rdquo; or &ldquo;$&rdquo; in
this prospectus are to U.S. dollars, and all references to &ldquo;shekels&rdquo; or &ldquo;NIS&rdquo; are to New Israeli Shekels.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SUMMARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">This prospectus is part of a registration statement on Form
F-3 that we filed with the Securities and Exchange Commission, or SEC, using a &ldquo;shelf&rdquo; registration process. Under
this process, we may sell from time to time any combination of the securities described in this prospectus in one or more offerings
up to a total dollar amount of $60,000,000 or the equivalent denominated in foreign currencies or foreign currency units. This
prospectus does not contain all of the information included in the registration statement. For a more complete understanding of
the offering of the securities, you should refer to the registration statement, including its exhibits.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">This prospectus provides you with a general description of the
securities we may offer. Each time we sell securities, we will provide a prospectus supplement that will contain specific information
about the terms of that offering. The prospectus supplement may also add, update or change information contained in this prospectus,
and may also contain information about any material federal income tax considerations relating to the securities covered by the
prospectus supplement. You should read both this prospectus and any prospectus supplement together with additional information
under the headings &ldquo;<I>Where You Can Find More Information</I>&rdquo; and &ldquo;<I>Incorporation of Certain Information
by Reference</I>.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">This summary may not contain all of the information that may
be important to you. You should read this entire prospectus, including the financial data and related notes incorporated by reference
in this prospectus, before making an investment decision. This summary contains forward-looking statements that involve risks and
uncertainties. Our actual results may differ significantly from the results discussed in the forward-looking statements. Factors
that might cause or contribute to such differences include those discussed in <I>&ldquo;Risk Factors&rdquo;</I> and <I>&ldquo;Forward-Looking
Statements.&rdquo;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Magic Software Enterprises Ltd.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Magic Software Enterprises Ltd. develops, markets, sells and
supports an application platform and business and process integration solutions and offers information technology, or IT, professional
services. Our products and services are available through a global network of regional offices, independent software vendors, or
ISVs, system integrators, distributors and value added resellers as well as original equipment manufacturers and consulting partners
in approximately 50 countries. Our offerings provide our partners and customers with the ability to develop business applications,
leverage existing IT resources, enhance business agility, and focus on core business priorities to gain maximum return on their
existing and new IT investments. We are known for our metadata driven, code-free approach, allowing users to focus on business
logic rather than technology requirements. This approach forms the driving principle of both our Magic xpa application platform
and our Magic xpi integration platform. Our ordinary shares are listed on the NASDAQ Global Select Market under the symbol &ldquo;MGIC&rdquo;
and are also traded on the Tel Aviv Stock Exchange, or TASE.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Corporate Information</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We were incorporated under the laws of the State of Israel in
February 1983 as Mashov Software Export (1983) Ltd. and we changed our name to Magic Software Enterprises Ltd. in 1991. We are
a public limited liability company and operate under the Israeli Companies Law 1999 and associated legislation. Our registered
offices and principal place of business are located at 5 Haplada Street, Or-Yehuda 60218, Israel, and our telephone number is +972-3-538-9292.
Our U.S. subsidiary, Magic Software Enterprises Inc., is located at 23046 Avenida de la Carlota, Laguna Hills, CA 92653. Our website
address is <U>www.magicsoftware.com.</U> The information on our website is not incorporated by reference into this prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>RISK FACTORS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">An investment in our securities is speculative and involves
a high degree of risk. Therefore, you should not invest in our securities unless you are able to bear a loss of your entire investment.
You should carefully consider the following factors as well as the other information contained in this prospectus and in the other
reports that we file with the SEC and that we incorporate by reference into this prospectus before deciding to invest in our securities.
This prospectus and statements that we may make from time to time may contain forward-looking information. There can be no assurance
that actual results will not differ materially from our expectations, statements or projections. Factors that could cause actual
results to differ from our expectations, statements or projections include the risks and uncertainties relating to our business
described below. The information in this prospectus is complete and accurate as of the date of this prospectus, but the information
may change thereafter.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Risks Related to Our Business and Our Industry</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We are dependent on a limited number of core product families
and services and a decrease in revenues from these products and services would adversely affect our business, results of operations
and financial condition; our future success will be largely dependent on the acceptance of future releases of our core products
and if we are unsuccessful with these efforts, our business, results of operations and financial condition will be adversely affected.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We derive a significant portion of our revenues from sales of
application platforms and integration products primarily under our Magic xpa, Magic xpi and AppBuilder brands and from related
professional services, software maintenance and technical support as well as from other IT professional services, which include
IT consulting and staffing services. Our future growth depends heavily on our ability to effectively develop and sell new products
developed by us or acquired from third parties as well as add new features to existing products. A decrease in revenues from our
principal products and services would adversely affect our business, results of operations and financial condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our future success will also be dependent on the continued acceptance
of Magic xpa and Magic xpi. The continued acceptance of these products rely in part on the continued acceptance and growth of the
cloud market, including rich internet applications, mobile and software as a service, or SaaS, for which they are particularly
useful and advantageous. We will need to continue to enhance our products and if new versions of such products are not accepted,
our business, results of operations and financial condition may be adversely affected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Rapid technological changes may adversely affect the market
acceptance of our products and services, and our business, results of operations and financial condition could be adversely affected;
adapting to evolving technologies can require substantial financial investments, distract management and adversely affect the demand
for our existing products or services.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We compete in a market that is characterized by rapid technological
changes. Other companies are also seeking to offer Internet-related solutions, such as cloud computing, to generate growth. These
companies may develop technological or business model innovations in the markets that we seek to address that are, or are perceived
to be, equivalent or superior to our products. In addition, our customers&rsquo; business models may change in ways that we do
not anticipate and these changes could reduce or eliminate our customers&rsquo; needs for our products and services. Our operating
results depend on our ability to adapt to market changes and develop and introduce new products and services into existing and
emerging markets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The introduction of new technologies and devices could render
existing products and services obsolete and unmarketable and could exert price pressures on our products and services. Our future
success will depend upon our ability to address the increasingly sophisticated needs of our customers by:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 7%">&nbsp;</td>
    <td style="width: 3%"><font style="font-family: Symbol">&middot;</font></td>
    <td style="width: 90%">Supporting existing and emerging hardware, software, databases and networking platforms; and</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <td style="width: 7%">&nbsp;</td>
    <td style="width: 3%"><font style="font-family: Symbol">&middot;</font></td>
    <td style="width: 90%">Developing and introducing new and enhanced software development technology and applications that keep pace with such technological developments, emerging new markets and changing customer requirements.</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Adapting to evolving technologies can require substantial
financial investments, distract management and adversely affect the demand for our existing products and services. In addition,
if release dates of any future products or enhancements are delayed or if they fail to achieve market acceptance when released,
our business, financial condition and results of operations could be adversely affected.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Adapting to evolving technologies may require us to invest a
significant amount of resources into the development, integration and marketing of those technologies. The acceptance and growth
of cloud computing and enterprise mobility are examples of rapidly changing technologies that we have adapted and productized.
This adaptation already required us to make a substantial financial investment to develop and implement cloud computing and enterprise
mobility into our software solution models and has required significant attention from our management to refine our business strategies
to include the delivery of these solutions. As the market continues to adopt these new technologies, we expect to continue to make
substantial investments in our service solutions and system integrations related to these changing technologies. &nbsp;Even if
we succeed in adapting to a new technology by developing attractive products and services and successfully bringing them to market,
there is no assurance that the new product or service will have a positive impact on our financial performance and could even result
in lower revenue, lower margins and higher costs and therefore could negatively impact our financial performance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We face intense competition in the markets in which we
operate. This competition could adversely affect our business, results of operations and financial condition.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We compete with other companies in the areas of application
platforms, business integration and business process management, or BPM, tools, and in the applications and services markets in
which we operate. The growth of the SaaS market has increased the competition in these areas. We expect that such competition will
increase in the future, both with respect to our technology, applications and services which we currently offer and applications
and services which we and other vendors are developing. Increased competition, direct and indirect, could adversely affect our
business, financial condition and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We also compete with other companies in the technical IT consulting
and staffing services industry. This industry is highly competitive and fragmented and has low entry barriers. We, through three
of our subsidiaries in the United States and three of our subsidiaries in Israel, compete for potential clients with providers
of outsourcing services, systems integrators, computer systems consultants, other providers of technical IT consulting services
and, to a lesser extent, temporary personnel agencies. We expect competition to increase, and we may not be able to remain competitive.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Some of our existing and potential competitors are larger companies,
have substantially greater resources than us, including financial, technological, marketing, skilled human resources and distribution
capabilities, and enjoy greater market recognition than us. We may not be able to differentiate our products and services from
those of our competitors, offer our products as part of integrated systems or solutions to the same extent as our competitors,
or successfully develop or introduce new products that are more cost-effective, or offer better performance than our competitors.
Failure to do so could adversely affect our business, financial condition and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We have a history of quarterly fluctuations in our results
of operations and expect these fluctuations to continue.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We have experienced, and in the future may continue to experience,
significant fluctuations in our quarterly results of operations. Factors that may contribute to fluctuations in our quarterly results
of operations include:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>The size and timing of orders;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>The high level of competition that we encounter;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>The timing of our products introductions or enhancements or those of our competitors or of providers of complementary products;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>Market acceptance of our new products, applications and services;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>The purchasing patterns and budget cycles of our customers and end-users;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>The mix of product sales;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>Exchange rate fluctuations;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>General economic conditions; and</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>The integration of newly acquired businesses.</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our customers ordinarily require the delivery of our products
promptly after we accept their orders. With the exception of contracts for services, we usually do not have a backlog of orders
for our products. Consequently, revenues from our products in any quarter depend on orders received and products provided by us
and accepted by the customers in that quarter. A deferral in the placement and acceptance of any large order from one quarter to
another could adversely affect our results of operations for the prior quarter. Our customers sometimes require an acceptance test
for services we provide and as a result, we may have a significant backlog of orders for our services. Our revenues from services
depend on orders received and services provided by us and accepted by our customers in that quarter. If sales in any quarter do
not increase correspondingly or if we do not reduce our expenses in response to level or declining revenues in a timely fashion,
our financial results for that quarter may be adversely affected. For these reasons, quarter-to-quarter comparisons of our results
of operations are not necessarily meaningful and you should not rely on the results of our operations in any particular quarter
as an indication of future performance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Unfavorable national and global economic conditions could
adversely affect our business, operating results and financial condition.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">During periods of slowing economic activity our customers may
reduce their demand for our products, technology and professional services, which would reduce our sales, and our business, operating
results and financial condition may be adversely affected. Economies throughout the world currently face a number of challenges,
including threatened sovereign defaults, credit downgrades, restricted credit for businesses and consumers and potentially falling
demand for a variety of products and services. Notwithstanding the improving economic conditions in some of our markets, many companies
are still cutting back expenditures or delaying plans to add additional personnel or systems. Any further worsening of the global
economic condition could result in longer sales cycles, slower adoption of new technologies and increased price competition for
our products and services. We could also be exposed to credit risk and payment delinquencies on our accounts receivable, which
are not covered by collateral. Any of these events would likely harm our business, operating results and financial condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We may encounter difficulties in realizing the potential
financial or strategic benefits of recent business acquisitions. We expect to make additional acquisitions in the future that could
disrupt our operations and harm our operating results.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">It is a part of our business strategy to pursue acquisitions
and other initiatives in order to expand our product offerings or services or otherwise enhance our market position and strategic
strengths. In the past three years we made a number of acquisitions, including: (i) our distributer in South Africa, Magix Integration
(Proprietary) Ltd., or Magix Integration, which specializes in the software integration and application development of our platforms
as well as the support of large-scale and complex systems in the public and financial sectors in South Africa; (ii) the AppBuilder
activity of BluePhoenix Solutions Ltd., or AppBuilder, a development platform for managing, maintaining, and reusing business applications
required by large-scale enterprises; (iii) Complete Business Solutions Ltd., a software solution provider and a Business Partner
of SAP; and (iv) Comm-IT Group, a software and systems development house that specializes in providing advanced IT and communications
services and solutions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Acquisitions involve numerous risks, including the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>Difficulties in integrating the operations, systems, technologies, products, and personnel of the acquired businesses or enterprises;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>Diversion of management&rsquo;s attention from normal daily operations of the business and the challenges of managing larger and more widespread operations resulting from acquisitions;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>Potential difficulties in completing projects associated with in-process research and development;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>Difficulties in entering markets in which we have no or limited direct prior experience and where competitors in such markets have stronger market positions;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>Initial dependence on unfamiliar supply chains or relatively small supply partners;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>Insufficient revenue to offset increased expenses associated with acquisitions; and</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>The potential loss of key employees, customers, distributors, vendors and other business partners of the companies we acquire following and continuing after announcement of acquisition plans.</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Mergers and acquisitions of companies are inherently risky and
subject to many factors outside of our control and no assurance can be given that our future acquisitions will be successful and
will not adversely affect our business, operating results, or financial condition. Failure to manage and successfully integrate
acquisitions could materially harm our business and operating results. Prior acquisitions have resulted in a wide range of outcomes,
from successful introduction of new products and technologies to a failure to do so. Even when an acquired company has previously
developed and marketed products, there can be no assurance that new product enhancements will be made in a timely manner or that
pre-acquisition due diligence will have identified all possible issues that might arise with respect to such products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>The revenues of our principal IT professional services
subsidiary are dependent upon one key customer and a significant decrease in revenues from such customer could adversely affect
our business, results of operations and financial condition.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The revenues of our principal IT professional services subsidiary
are dependent upon Ericsson Inc., or Ericsson, which is currently our largest customer, accounting for 29%, 25%, 19% 22% and 14%
of our total revenues in 2010, 2011 and 2012 and the six month periods ended June 30, 2012 and 2013, respectively<B>.</B> We do
not know if, or for how much longer, Ericsson will continue to purchase the IT professional services of such subsidiary. A significant
decrease in revenues from Ericsson may adversely affect our business, results of operations and financial condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We derive a significant portion of our revenues from independent
distributors who are under no obligation to purchase our products and the loss of such independent distributors could adversely
affect our business, results of operations and financial condition.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We sell our products through our direct sales representatives,
as well as through third parties that use our technology to develop and sell solutions to their customers, referred to as ISVs
or Magic Solution Providers, or MSPs, and also through system integrators. These independent MSPs then sell the applications they
develop on the Magic xpa platform to end-users. In some regions, especially in Asia-Pacific, Eastern Europe, Spain, Italy, South
America and a few countries in the Mediterranean area<B>,</B> we sell our products through regional distributors. We are dependent
upon the acceptance of our products by our independent distributors and their active marketing and sales efforts. Typically, our
arrangements with our independent distributors do not require them to purchase specified amounts of products or prevent them from
selling <FONT STYLE="background-color: white">non-</FONT>competitive products. The independent distributors may not continue, or
may not give a high priority to, marketing and supporting our products. Our results of operations could be adversely affected by
changes in the financial condition, business, marketing strategies, local and global economic conditions, or results of our independent
distributors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We may lose independent distributors and we may not succeed
in developing new distribution channels which could adversely affect our business, results of operations and financial condition.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If any of our distribution relationships are terminated, we
may not be successful in replacing them on a timely basis, or at all. In addition, we will need to develop new sales channels for
new products, and we may not succeed in doing so. Any changes in our distribution and sales channels, or our inability to establish
effective distribution and sales channels for new markets, could adversely impact our ability to sell our products and result in
a loss of revenues and profits.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Changes in the ratio of our revenues generated from different
revenue elements may adversely affect our gross profit margins.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We derive our revenues from the sale of software licenses, related
professional services, maintenance and technical support as well as from other IT professional services. Our gross margin is affected
by the proportion of our revenues generated from the sale of each of those elements of our revenues. Our revenues from the sale
of our software licenses, related professional services, maintenance and technical support have higher gross margins than our revenues
from other IT professional services. Our software licenses revenues include the sale of third party software licenses, which have
a lower gross margin than sales of our software products. Any increase in the portion of third party software license sales out
of total license sales will decrease our gross profit margin. If the relative proportion of our revenues from the sale of IT professional
services increases as a percentage of our total revenues, our gross profit margins may decline in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We derive a significant portion of our revenues from IT
professional services. Our ability to attract and retain qualified computer professionals may adversely affect our business, results
of operations and financial condition.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The success of our IT professional services is dependent upon
our ability to attract and retain qualified computer professionals to serve as temporary IT personnel. Competition for the limited
number of qualified professionals with a working knowledge of certain sophisticated computer languages is intense.&nbsp;&nbsp;We
compete for technical personnel with other providers of technical IT consulting and staffing services, systems integrators, providers
of outsourcing services, computer systems consultants, clients and, to a lesser extent, temporary personnel agencies. A shortage
of, and significant competition for, software professionals with the skills and experience necessary to perform the services offered
by these subsidiaries may adversely affect our business, results of operations and financial condition. In addition, our ability
to maintain and renew existing engagements and obtain new business for our contract IT professional services operations depends,
in large part, on our ability to hire and retain technical personnel with the IT skills that keep pace with continuing changes
in software evolution, industry standards and technologies, and client preferences. Demand for qualified professionals conversant
with certain technologies may outstrip supply as new and additional skills are required to keep pace with evolving computer technology
or as competition for technical personnel increases. Increasing demand for qualified personnel could also result in increased expenses
to hire and retain qualified technical personnel and could adversely affect our profit margins.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Our widespread operations may strain our management, operational
and financial resources and could adversely affect our business, results of operations and financial condition.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our widespread operations have significantly strained our management,
operational and financial resources in the past. Any future growth may increase this strain. To manage future growth effectively,
we may:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>Expand our operational, management, financial, marketing and research and development functions;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>Train, motivate, manage and retain qualified employees; and</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>Hire additional personnel.</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We may not succeed in managing future growth, which could adversely
affect our business, results of operations and financial condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We may encounter difficulties with our international operations
and sales which could adversely affect our business, results of operations and financial condition.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">While our principal executive offices are located in Israel,
95%, 93%, 91%, 92% and 84% of our sales in 2010, 2011 and 2012 and the six month periods ended June 30, 2012 and 2013, respectively,
were generated in other countries and regions including, but not limited to the United States, Europe, Japan, Asia-Pacific, India
and South Africa. Our success in becoming a stronger competitor in the sale of application platforms and integration solutions
is dependent upon our ability to increase our sales in all our markets. Our efforts to increase our penetration into these markets
are subject to risks inherent to such markets, including the high cost of doing business in such locations. Our efforts may be
costly and they may not result in profits, which could adversely affect our business, results of operations and financial condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our international operation subjects us to many risks inherent
to international business activities, including:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>Limitations and disruptions resulting from the imposition of government controls;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>Changes in regulatory requirements;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>Export license requirements;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>Economic or political instability;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>Trade restrictions;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>Changes in tariffs;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>Currency fluctuations;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>Difficulties in the collection of receivables;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>Foreign tax consequences;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>Greater difficulty in safeguarding intellectual property;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>Difficulties in managing overseas subsidiaries and international operations; and</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We may encounter significant difficulties in connection with
the sale of our products and services in international markets as a result of one or more of these factors and our business, results
of operations and financial condition could be adversely affected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Breaches of network or information technology security,
natural disasters or terrorist attacks could have an adverse effect on our business.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Cyber attacks or other breaches of network or IT security, natural
disasters, terrorist acts or acts of war may cause equipment failures or disrupt our systems and operations. We may be subject
to attempts to breach the security of our networks and IT infrastructure through cyber attack, malware, computer viruses and other
means of unauthorized access.&nbsp; While we maintain insurance coverage for some of these events, the potential liabilities associated
with these events could exceed the insurance coverage we maintain.&nbsp; Our inability to operate our facilities as a result of
such events, even for a limited period of time, may result in significant expenses or loss of market share to other competitors
for our application platforms as well as in the process and business integration technologies and IT services market. In addition,
a failure to protect the privacy of customer and employee confidential data against breaches of network or IT security could result
in damage to our reputation. A failure to protect the privacy of customer and employee confidential data against breaches of network
or IT security could result in damage to our reputation. To date, we have not been subject to cyber attacks or other cyber incidents
which, individually or in the aggregate, resulted in a material impact to our operations or financial condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Maintaining the security of our products, computers and networks
is a critical issue for us and our customers. Security researchers, criminal hackers and other third parties regularly develop
new techniques to penetrate computer and network security measures. In addition, hackers also develop and deploy viruses, worms
and other malicious software programs, some of which may be specifically designed to attack our products, systems, computers or
networks. Additionally, outside parties may attempt to fraudulently induce our employees or users of our products to disclose sensitive
information in order to gain access to our data or our customers&rsquo; data. These potential breaches of our security measures
and the accidental loss, inadvertent disclosure or unauthorized dissemination of proprietary information or sensitive, personal
or confidential data about us, our employees or our customers, including the potential loss or disclosure of such information or
data as a result of hacking, fraud, trickery or other forms of deception, could expose us, our employees, our customers or the
individuals affected to a risk of loss or misuse of this information, result in litigation and potential liability or fines for
us, damage our brand and reputation or otherwise harm our business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Currency exchange rate fluctuations in the markets in
which we conduct business could adversely affect our business, results of operations and financial condition.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our financial statements are stated in U.S. dollars, our functional
currency. However, in 2011 and 2012, over 46% and 49% of our revenues, respectively, were derived from sales outside the United
States, particularly Europe, Japan, Israel, the United Kingdom and South Africa. We also maintain substantial non-U.S. dollar balances
of assets, including cash and accounts receivable, and liabilities, including accounts payable. Therefore, fluctuations in the
value of the currencies in which we do business relative to the U.S. dollar may adversely affect our business, results of operations
and financial condition, by decreasing the U.S. dollar value of assets held in other currencies and increasing the U.S. dollar
amount of liabilities payable in other currencies, or by decreasing the U.S. dollar value of our revenues in other currencies and
increasing the U.S. dollar amount of our expenses in other currencies. Even if we use derivatives or other instruments to hedge
part or all of our exposures from time to time, they may not effectively eliminate such risk, if at all.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>The increasing amount of intangible assets and goodwill
recorded on our balance sheet may lead to significant impairment charges in the future.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We regularly review our long-lived assets, including identifiable
intangible assets and goodwill, for<FONT STYLE="background-color: white"> </FONT>impairment. Goodwill and indefinite life intangible
assets are subject to impairment review at least annually. Other long-lived assets are reviewed when there is an indication that
impairment may have occurred. The amount of goodwill and identifiable intangible assets on our consolidated balance sheet has increased
significantly to $80 million as a result of our acquisitions and capitalized software development costs, and may increase further
following future acquisitions. Impairment testing under U.S. GAAP may lead to further impairment charges in the future. Any significant
impairment charges could have a material adverse effect on our results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Our products have a lengthy sales cycle which could adversely
affect our revenues.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our customers typically use our technologies to develop and
deploy as well as to integrate applications that are critical to their businesses. As a result, the licensing and implementation
of our technologies generally involves a significant commitment of attention and resources by prospective customers. Because of
the long approval process that typically accompanies strategic initiatives or capital expenditures by companies, our sales process
is often delayed, with little or no control over any delays encountered by us. Our sales cycle can be further extended for sales
made through third party distributors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Our products may contain defects that may be costly to
correct, delay their market acceptance and expose us to difficulties in the collection of receivables and to litigation.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Despite our regular quality assurance testing, as well as testing
performed by our partners and end-users who participate in our beta-testing programs, errors may be found in our software products
or in applications developed with our technology. This risk is exacerbated by the fact that a significant percentage of the applications
developed with our technology were and are likely to continue to be developed by our ISV partners and system integrators over whom
we exercise no supervision or control. If defects are discovered, we may not be able to successfully correct them in a timely manner
or at all. Defects and failures in our products could result in a loss of, or delay in, market acceptance of our products, as well
as difficulties in the collection of receivables and litigation, and could damage our reputation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our standard license agreement with our customers contains provisions
designed to limit our exposure to potential product liability claims that may not be effective or enforceable under the laws of
some jurisdictions. Also, the professional liability insurance that we maintain may not be sufficient against potential claims.
Accordingly, we could fail to realize revenues and suffer damage to our reputation as a result of, or in defense of, a substantial
claim.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Our proprietary technology is difficult to protect and
unauthorized use of our proprietary technology by third parties may impair our ability to compete effectively.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our success and ability to compete depend in large part upon
our ability to protect our proprietary technology. We rely on a combination of trade secret and copyright laws and confidentiality,
non-disclosure and assignment-of-inventions agreements to protect our proprietary technology. We do not have any patents. Our policy
is to require employees and consultants to execute confidentiality and non-compete agreements upon the commencement of their relationships
with us. These measures may not be adequate to protect our technology from third-party infringement, and our competitors might
independently develop technologies that are substantially equivalent or superior to ours. Additionally, our products may be sold
in foreign countries that provide less protection for intellectual property rights than that provided under U.S. or Israeli laws.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Third parties have in the past, and may in the future,
claim that we infringe upon their intellectual property rights and could harm our business.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">From time to time third parties have in the past, and may in
the future, assert infringement claims against us or claim that we have violated a patent or infringed upon a copyright, trademark
or other proprietary right belonging to them. Intellectual property litigation is expensive and any court ruling against us or
infringement claim, even one without merit, could result in the expenditure of significant financial and managerial resources to
defend any such claims, which will adversely affect our financial condition and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We may be unable to attract, train and retain qualified
personnel, which could adversely affect our business, results of operations and financial condition.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In the event our business grows in the future, we will need
to hire additional qualified personnel. The process of locating, training and successfully integrating qualified personnel into
our operations can be lengthy and expensive. We may not be able to attract the personnel we need. Any loss of members of senior
management or key technical personnel, or any failure to attract or retain highly qualified employees as needed, could have an
adverse effect on our business, financial condition and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Because we are controlled by Formula Systems (1985) Ltd.
and Asseco Poland S.A., investors will not be able to affect the outcome of shareholder votes.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Formula Systems (1985) Ltd., or Formula Systems (symbol: FORTY),
an Israeli company whose shares trade on the NASDAQ Global Select Market and the TASE, directly owned 19,160,044 or 52.1%, of our
outstanding ordinary shares as of June 30, 2013. Asseco Poland S.A., or Asseco, a Polish company listed on Warsaw Stock Exchange,
owns 43.36% of the outstanding shares of Formula Systems. Although transactions between us and our controlling shareholders are
subject to special approvals under Israeli law, Formula Systems and Asseco will be able to exercise control over our operations
and business strategy and affairs, including any determinations with respect to potential mergers or other business combinations
involving us, our acquisition or disposition of assets, our incurrence of indebtedness, our issuance of any additional ordinary
shares or other equity securities, our repurchase or redemption of ordinary shares and our payment of dividends. Similarly, Formula
Systems and Asseco will be able to control most matters requiring shareholder approval, including the election of our directors
(subject to a special majority required for the election of external directors). Such concentration of ownership may have the effect
of delaying or preventing an acquisition or a change in control of us.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>If we are unable to maintain effective internal control
over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002, the reliability of our financial statements
may be questioned and our share price may suffer.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Sarbanes-Oxley Act of 2002 imposes certain duties on us
and on our executives and directors. To comply with this statute, we are required to document and test our internal control over
financial reporting, and our independent registered public accounting firm must issue an attestation report on our internal control
procedures, and our management is required to assess and issue a report concerning our internal control over financial reporting.
Our efforts to comply with these requirements have resulted in increased general and administrative expenses and a diversion of
management time and attention, and we expect these efforts to require the continued commitment of significant resources. We may
identify material weaknesses or significant deficiencies in our assessments of our internal controls over financial reporting.
Failure to maintain effective internal control over financial reporting could result in investigation or sanctions by regulatory
authorities, and could adversely affect our operating results, investor confidence in our reported financial information and the
market price of our ordinary shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Risks Related to Ownership of Our Ordinary Shares</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Our share price has been volatile in the past and may
continue to be susceptible to significant market price and volume fluctuations in the future.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our ordinary shares have experienced significant market price
and volume fluctuations in the past and may experience significant market price and volume fluctuations in the future. While in
2010 our share price increased by 170%, in 2011 and 2012 our share price dropped by<FONT STYLE="background-color: white"> 20</FONT>%
and 7%, respectively. Our market price and volume may fluctuate in response to factors such as the following, some of which are
beyond our control:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>Quarterly variations in our operating results;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>Changes in expectations as to our future financial performance, including financial estimates by securities analysts and investors;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>Announcements of technological innovations or new products by us or our competitors;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>Announcements by us or our competitors of significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>Changes in the status of our intellectual property rights;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>Announcements by third parties of significant claims or proceedings against us;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>Additions or departures of key personnel;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>The public&rsquo;s response to our press releases, our other public announcements and our filings with the SEC and the Israeli Securities Authority;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>Adoption of a dividend policy;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>Future sales of our ordinary shares by our directors, officers and significant shareholders;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>Political and economic conditions, such as a recession or interest rate or currency rate fluctuations or political events;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>Other events or factors in any of the markets in which we operate, including those resulting from war, incidents of terrorism, natural disasters or responses to such events; and</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>General trends of the stock markets.</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Domestic and international stock markets often experience extreme
price and volume fluctuations. The market prices of ordinary shares of software companies have been extremely volatile. Stock prices
of many software companies have often fluctuated in a manner unrelated or disproportionate to the operating performance of such
companies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In the past, securities class action litigation has often been
brought against registrants following periods of volatility in the market price of their securities. We may in the future be the
target of similar litigation. Securities litigation could result in substantial costs and divert management&rsquo;s attention and
resources.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Our ordinary shares are traded on more than one market
and this may result in price variations.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our ordinary shares are traded primarily on the NASDAQ Global
Select Market and on the TASE. Trading in our ordinary shares on these markets is made in different currencies (U.S. dollars on
the NASDAQ Global Select Market and NIS on the TASE) and at different times (resulting from different time zones, different trading
days and different public holidays in the United States and Israel). Consequently, the trading prices of our ordinary shares on
these two markets may differ. Any decrease in the trading price of our ordinary shares on one of these markets could cause a decrease
in the trading price of our ordinary shares on the other market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>The trading volume of our shares has been low in the past
and may be low in the future, resulting in lower than expected market prices for our shares.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our shares have traded at low volumes in the past and may trade
at low volumes in the future for reasons that may be related or unrelated to our performance. This may result in a lack of liquidity,
which could negatively affect the market price for our ordinary shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We may in the future be classified as a passive foreign
investment company, or PFIC, which will subject our U.S. investors to adverse tax rules.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Holders of our ordinary shares who are U.S. residents face income
tax risks<B><I>.</I></B> There is a risk that we will be treated as a PFIC. Our treatment as a PFIC could result in a reduction
in the after-tax return to the U.S. holders of our ordinary shares and would likely<B> </B>cause a reduction in the value of our
shares. For U.S. federal income tax purposes, we will generally be classified as a PFIC for any taxable year in which either: (i)
75% or more of our gross income is passive income or (ii) at least 50% of the average value of our assets for the taxable year
produce or are held for the production of passive income. If we were determined to be a PFIC for U.S. federal income tax purposes,
highly complex rules would apply to U.S. holders owning our ordinary shares and such U.S. holders could suffer adverse U.S. tax
consequences. Accordingly, you are urged to consult your tax advisors regarding the application of such rules. United States residents
should carefully read &ldquo;Item 10E. Additional Information - Taxation, United States Federal Income Tax Consequences&rdquo;
of our Annual Report on Form 20-F for a more complete discussion of the U.S. federal income tax risks related to owning and disposing
of our ordinary shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Risks Related to Our Location in Israel</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Political, economic and military instability in Israel may
disrupt our operations and negatively affect our business condition, harm our results of operations and adversely affect our share
price.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We are incorporated under the laws of, and our principal executive
offices and manufacturing and research and development facilities are located in, the State of Israel.&nbsp; As a result, political,
economic and military conditions affecting Israel directly influence us.&nbsp; Any major hostilities involving Israel, a full or
partial mobilization of the reserve forces of the Israeli army, the interruption or curtailment of trade between Israel and its
present trading partners, or a significant downturn in the economic or financial condition of Israel could adversely affect our
business, financial condition and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Since its establishment in 1948, Israel has been involved in
a number of armed conflicts with its Arab neighbors and a state of hostility, varying from time to time in intensity and degree,
has continued into 2013. Also, since 2011, riots and uprisings in several countries in the Middle East and neighboring regions
have led to severe political instability in several neighboring states and to a decline in the regional security situation. Such
instability may affect the local and global economy, could negatively affect business conditions and, therefore, could adversely
affect our operations. &nbsp;In addition, Iran has threatened to attack Israel and is widely believed to be developing nuclear
weapons. Iran is also believed to have a strong influence among extremist groups in areas that neighbor Israel, such as Hamas in
Gaza and Hezbollah in Lebanon. This situation may potentially escalate in the future to violent events which may affect Israel
and us. To date, these matters have not had any material effect on our business and results of operations; however, the regional
security situation and worldwide perceptions of it are outside our control and there can be no assurance that these matters will
not negatively affect us in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Furthermore, there are a number of countries, primarily in the
Middle East, as well as Malaysia and Indonesia, that restrict business with Israel or Israeli companies, and we are precluded from
marketing our products to these countries.&nbsp; Restrictive laws or policies directed towards Israel or Israeli businesses may
have an adverse impact on our operations, our financial results or the expansion of our business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Our results of operations may be adversely affected by
the obligation of our personnel to perform military service.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Many of our executive officers and employees in Israel are obligated
to perform annual reserve duty in the Israeli Defense Forces and may be called for active duty under emergency circumstances at
any time. If a military conflict or war arises, these individuals could be required to serve in the military for extended periods
of time. Our operations could be disrupted by the absence for a significant period of one or more of our executive officers or
key employees or a significant number of other employees due to military service. Any disruption in our operations could adversely
affect our business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>We currently have the ability to benefit from government
tax benefits, which may be cancelled or reduced in the future.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We are currently eligible to<B> </B>receive tax benefits under
programs of the Government of Israel. In order to maintain our eligibility for these tax benefits, we must continue to meet specific
requirements. If we fail to comply with these requirements in the future, such tax benefits may be cancelled.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Service and enforcement of legal process on us and our
directors and officers may be difficult to obtain.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We are incorporated in Israel and some of our directors and
executive officers reside outside the United States. Service of process upon them may be difficult to effect within the United
States. Furthermore, most of our assets and the assets of some of our executive officers are located outside the United States.
Therefore, a judgment obtained against us or any of them in the United States, including one based on the civil liability provisions
of the U.S. federal securities laws may not be collectible in the United States and may not be enforced by an Israeli court. It
also may be difficult for you to assert U.S. securities law claims in original actions instituted in Israel.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Provisions of Israeli law may delay, prevent or make difficult
an acquisition of us, which could prevent a change of control and therefore depress the price of our shares.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Israeli corporate law regulates mergers, requires tender offers
for acquisitions of shares above specified thresholds, requires special approvals for transactions involving directors, officers
or significant shareholders and regulates other matters that may be relevant to these types of transactions. Furthermore, Israeli
tax considerations may make potential transactions unappealing to us or to some of our shareholders. These provisions of Israeli
corporate and tax law may have the effect of delaying, preventing or complicating a merger with, or other acquisition of, us. This
could cause our ordinary shares to trade at prices below the price for which third parties might be willing to pay to gain control
of us. Third parties who are otherwise willing to pay a premium over prevailing market prices to gain control of us may be unable
or unwilling to do so because of these provisions of Israeli law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>The rights and responsibilities of our shareholders are
governed by Israeli law and differ in some respects from the rights and responsibilities of shareholders under U.S. law.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We are incorporated under Israeli law. The rights and responsibilities
of holders of our ordinary shares are governed by our memorandum of association, articles of association and by Israeli law. These
rights and responsibilities differ in some respects from the rights and responsibilities of shareholders in typical U.S. corporations.
In particular, a shareholder of an Israeli company has a duty to act in good faith in exercising his or her rights and fulfilling
his or her obligations toward the company and other shareholders and to refrain from abusing his power in the company, including,
among other things, in voting at the general meeting of shareholders on certain matters. Israeli law provides that these duties
are applicable in shareholder votes at the general meeting with respect to, among other things, amendments to a company&rsquo;s
articles of association, increases in a company&rsquo;s authorized share capital, mergers and actions and transactions involving
interests of officers, directors or other interested parties which require the shareholders&rsquo; general meeting&rsquo;s approval.
In addition, a controlling shareholder of an Israeli company or a shareholder who knows that he or she possesses the power to determine
the outcome of a vote at a meeting of our shareholders, or who has, by virtue of the company&rsquo;s articles of association, the
power to appoint or prevent the appointment of an office holder in the company, or any other power with respect to the company,
has a duty of fairness toward the company. The Israeli Companies Law does not establish criteria for determining whether or not
a shareholder has acted in good faith.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>As a foreign private issuer whose shares are listed on
the NASDAQ Global Select Market, we may follow certain home country corporate governance practices instead of certain NASDAQ requirements.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As a foreign private issuer whose shares are listed on the NASDAQ
Global Select Market, we are permitted to follow certain home country corporate governance practices instead of certain requirements
of the NASDAQ Stock Market Rules. Among other things, as a foreign private issuer we may also follow home country practice with
regard to, the composition of the board of directors, director nomination procedure, compensation of officers and quorum at shareholders&rsquo;
meetings. In addition, we may follow our home country law, instead of the NASDAQ Stock Market Rules, which require that we obtain
shareholder approval for certain dilutive events, such as for the establishment or amendment of certain equity based compensation
plans, an issuance that will result in a change of control of the company, certain transactions other than a public offering involving
issuances of a 20% or more interest in the company and certain acquisitions of the stock or assets of another company. Accordingly,
our shareholders may not be afforded the same protection as provided under NASDAQ&rsquo;s corporate governance rules. A foreign
private issuer that elects to follow a home country practice instead of such requirements must submit to NASDAQ in advance a written
statement from an independent counsel in such issuer&rsquo;s home country certifying that the issuer&rsquo;s practices are not
prohibited by the home country&rsquo;s laws. In addition, a foreign private issuer must disclose in its annual reports filed with
the SEC each such requirement that it does not follow and describe the home country practice followed by the issuer instead of
any such requirement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>FORWARD-LOOKING STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">This prospectus and the documents incorporated in it by reference
contain forward-looking statements which involve known and unknown risks and uncertainties. We include this notice for the express
purpose of permitting us to obtain the protections of the safe harbor provided by the Private Securities Litigation Reform Act
of 1995 with respect to all such forward-looking statements. Examples of forward-looking statements include: projections of capital
expenditures, competitive pressures, revenues, growth prospects, product development, financial resources and other financial matters.
You can identify these and other forward-looking statements by the use of words such as &ldquo;may,&rdquo; &ldquo;plans,&rdquo;
&ldquo;anticipates,&rdquo; &ldquo;believes,&rdquo; &ldquo;estimates,&rdquo; &ldquo;predicts,&rdquo; &ldquo;intends,&rdquo; &ldquo;potential&rdquo;
or the negative of such terms, or other comparable terminology.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our ability to predict the results of our operations or the
effects of various events on our operating results is inherently uncertain. Therefore, we caution you to consider carefully the
matters described under the caption &ldquo;Risk Factors&rdquo; and certain other matters discussed in this prospectus, the documents
incorporated by reference in this prospectus, and other publicly available sources. Such factors and many other factors beyond
the control of our management could cause our actual results, performance or achievements to be materially different from any future
results, performance or achievements that may be expressed or implied by the forward-looking statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>RATIO OF EARNINGS TO FIXED CHARGES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Our company&rsquo;s fixed charges are immaterial.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>CAPITALIZATION AND INDEBTEDNESS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The table below sets forth our capitalization as of June 30,
2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">As of June 30, 2013</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">(U.S. dollars in thousands)</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 82%; text-align: left">Short-term debt (including current maturities of long term loans and debt)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">93</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Long-term loans</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">359</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Total shareholders' equity</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">120,357</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Total liabilities and shareholders' equity</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">161,156</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>MARKET FOR OUR ORDINARY SHARES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Our ordinary shares are quoted on the NASDAQ Global Select
Market under the symbol &ldquo;MGIC&rdquo; and are listed on the Tel Aviv Stock Exchange. On December 18, 2013, the last reported
sale price of our ordinary shares on the NASDAQ Global Select Market was $6.90 and the last reported sale price of our ordinary
shares on the Tel Aviv Stock Exchange was $7.02. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Annual Share Price Information</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following table sets forth, for each of the years indicated,
the range of high ask and low bid prices of our ordinary shares on the NASDAQ Global Select Market (for periods from January 3,
2011) or the NASDAQ Global Market (for periods prior to January 3, 2011) and the TASE:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">NASDAQ</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Tel Aviv Stock Exchange*</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-bottom: 1pt; text-align: left">Year</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">High</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Low</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">High</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">Low</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 28%; text-align: left">2008</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">2.38</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">0.94</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">2.47</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">0.91</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">2009</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2.50</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.98</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2.38</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1.04</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">2010</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">8.43</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1.55</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">8.11</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1.56</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">2011</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">9.74</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">3.91</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">9.55</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">3.95</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">2012</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">7.32</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">3.76</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">7.42</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">3.94</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">* The U.S. dollar price of shares on the TASE
is determined by dividing the price of an ordinary share in NIS by the representative exchange rate of the NIS against the U.S.
dollar on the same date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Quarterly Share Price Information</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following table sets forth, for each of the financial quarters
in the two most recent financial years, the range of high ask and low bid prices of our ordinary shares on the NASDAQ Global Select
Market (for periods from January 3, 2011) or the NASDAQ Global Market (for periods prior to January 3, 2011) and the TASE:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 85%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"> NASDAQ </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"> Tel Aviv Stock Exchange* </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"> High </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"> Low </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"> High </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"> Low </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"> 2011 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 40%; text-align: left"> First quarter </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> $ </TD><TD STYLE="width: 12%; text-align: right"> 9.74 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> $ </TD><TD STYLE="width: 12%; text-align: right"> 5.04 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> $ </TD><TD STYLE="width: 12%; text-align: right"> 8.26 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> $ </TD><TD STYLE="width: 12%; text-align: right"> 7.12 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"> Second quarter </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 7.75 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 4.30 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 7.24 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 4.75 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> Third quarter </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 6.45 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 3.91 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 5.21 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 4.36 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"> Fourth quarter </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 6.38 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 3.92 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 5.37 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 4.66 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"> 2012 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> First quarter </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 7.32 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 4.97 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 7.42 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 4.98 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"> Second quarter </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 6.60 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 5.33 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 6.65 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 5.47 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> Third quarter </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 5.63 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 4.01 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 5.66 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 3.98 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"> Fourth quarter </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 4.92 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 3.76 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 4.99 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 3.94 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"> 2013 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> First quarter </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 5.58 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 4.46 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 5.42 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 4.53 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"> Second quarter </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 5.51 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 4.84 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 5.56 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 4.76 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"> Third quarter </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 6.95 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 5.32 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 6.86 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 5.42 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"> Fourth quarter (through December 18, 2013) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 7.17 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 6.12 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 7.05 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 6.14 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">* The U.S. dollar price of shares on the TASE is determined
by dividing the price of an ordinary share in NIS by the representative exchange rate of the NIS against the U.S. dollar on the
same date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Monthly Share Price Information</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The following table sets forth, for the most recent six months,
the range of high ask and low bid prices of our ordinary shares on the NASDAQ Global Select Market (for periods from January 3,
2011) or the NASDAQ Global Market (for periods prior to January 3, 2011) and the TASE:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 85%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"> NASDAQ </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"> Tel Aviv Stock Exchange* </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"> High </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"> Low </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"> High </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"> Low </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 40%"> June 2013 </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> $ </TD><TD STYLE="width: 12%; text-align: right"> 5.50 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> $ </TD><TD STYLE="width: 12%; text-align: right"> 5.17 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> $ </TD><TD STYLE="width: 12%; text-align: right"> 5.56 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> $ </TD><TD STYLE="width: 12%; text-align: right"> 5.25 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> July 2013 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 6.21 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 5.32 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 6.14 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 5.38 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD> August 2013 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 6.62 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 5.77 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 6.67 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 5.66 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> September 2013 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 6.95 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 6.56 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 6.90 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 6.50 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD> October 2013 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 6.92 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 6.12 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 6.88 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 6.12 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD> November 2013 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 6.62 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 6.17 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 6.73 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> $ </TD><TD STYLE="text-align: right"> 6.22 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">* The U.S. dollar price of shares on the TASE is determined
by dividing the price of an ordinary share in NIS by the representative exchange rate of the NIS against the U.S. dollar on the
same date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>USE OF PROCEEDS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Except as otherwise provided in the applicable prospectus supplement,
we intend to use the net proceeds from the sale of the securities covered by this prospectus for general corporate purposes, which
may include working capital expenditures, acquisitions and investments. Additional information on the use of net proceeds from
the sale of securities covered by this prospectus may be set forth in the prospectus supplement relating to the specific offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>PLAN OF DISTRIBUTION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We may sell securities in any of the ways described below, including
any combination thereof:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>to or through underwriters or dealers;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>through one or more agents; or</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>directly to one or more purchasers.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The distribution of the securities may be effected from time
to time in one or more transactions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>at a fixed price, or prices, which may be changed from time to time;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>at market prices prevailing at the time of sale;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>at prices related to such prevailing market prices; or</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>at negotiated prices.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Each prospectus supplement will describe the method of distribution
of the securities and any applicable restrictions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The prospectus supplement with respect to the securities of
a particular series will describe the terms of the offering of the securities, including the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>the name or names of any underwriters, dealers or agents, and the amounts of securities underwritten or purchased by each of
them;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>the initial public offering price of the securities and the proceeds to us and any discounts, commissions, or concessions allowed
or reallowed or paid to dealers; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>any securities exchanges on which the securities may be listed.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Any public offering price and any discounts or concessions allowed
or reallowed or paid to dealers may be changed from time to time. In no event will any underwriter or dealer receive fees, commissions,
and markups which, in the aggregate, would exceed eight percent of the price of the shares being registered.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Only the agents or underwriters named in the prospectus supplement
are agents or underwriters in connection with the securities being offered.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We may authorize underwriters, dealers, or other persons acting
as our agents to solicit offers by certain institutions to purchase securities from us pursuant to delayed delivery contracts providing
for payment and delivery on the date stated in the prospectus supplement. Each contract will be for an amount not less than, and
the aggregate amount of securities sold pursuant to such contracts shall not be less nor more than, the respective amounts stated
in the prospectus supplement. Institutions with whom the contracts, when authorized, may be made include commercial and savings
banks, insurance companies, pension funds, investment companies, educational and charitable institutions, and other institutions,
but shall in all cases be subject to our approval. Delayed delivery contracts will be subject only to those conditions set forth
in the prospectus supplement, and the prospectus supplement will set forth any commissions we pay for solicitation of these contracts.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Agents, underwriters and other third parties described above
may be entitled to indemnification by us against certain civil liabilities, including liabilities under the Securities Act of 1933,
or to contribution with respect to payments which the agents or underwriters may be required to make in respect thereof. Agents,
underwriters and such other third parties may be customers of, engage in transactions with, or perform services for us in the ordinary
course of business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Direct sales to investors or our shareholders may be accomplished
through subscription offerings or through shareholder purchase rights distributed to shareholders. In connection with subscription
offerings or the distribution of shareholder purchase rights to shareholders, if all of the underlying securities are not subscribed
for, we may sell any unsubscribed securities to third parties directly or through underwriters or agents. In addition, whether
or not all of the underlying securities are subscribed for, we may concurrently offer additional securities to third parties directly
or through underwriters or agents. If securities are to be sold through shareholder purchase rights, the shareholder purchase rights
will be distributed as a dividend to the shareholders for which they will pay no separate consideration. The prospectus supplement
with respect to the offer of securities under shareholder purchase rights will set forth the relevant terms of the shareholder
purchase rights, including:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>whether ordinary shares for those securities will be offered under the shareholder purchase rights;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>the number of those securities or warrants that will be offered under the shareholder purchase rights;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>the period during which and the price at which the shareholder purchase rights will be exercisable;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>the number of shareholder purchase rights then outstanding;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>any provisions for changes to or adjustments in the exercise price of the shareholder purchase rights; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>any other material terms of the shareholder purchase rights.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">One or more firms, referred to as &ldquo;remarketing firms,&rdquo;
may also offer or sell the securities, if the prospectus supplement so indicates, in connection with a remarketing arrangement
upon their purchase. Remarketing firms will act as principals for their own accounts or as our agents. These remarketing firms
will offer or sell the securities in accordance with the terms of the securities. The prospectus supplement will identify any remarketing
firm and the terms of its agreement, if any, with us and will describe the remarketing firm&rsquo;s compensation. Remarketing firms
may be deemed to be underwriters in connection with the securities they remarket. Remarketing firms may be entitled under agreements
that may be entered into with us to indemnification by us against certain civil liabilities, including liabilities under the Securities
Act of 1933, and may be customers of, engage in transactions with, or perform services for us in the ordinary course of business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We also may sell directly to investors through subscription
rights distributed to our shareholders on a pro rata basis. In connection with any distribution of subscription rights to shareholders,
if all of the underlying securities are not subscribed for, we may sell the unsubscribed securities directly to third parties or
may engage the services of one or more underwriters, dealers or agents, including standby underwriters, to sell the unsubscribed
securities to third parties.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Certain of the underwriters may use this prospectus and the
accompanying prospectus supplement for offers and sales related to market making transactions in the securities. These underwriters
may act as principal or agent in these transactions, and the sales will be made at prices related to prevailing market prices at
the time of sale.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The securities may be new issues of securities and may have
no established trading market. The securities may or may not be listed on a national securities exchange. Underwriters may make
a market in these securities, but will not be obligated to do so and may discontinue any market making at any time without notice.
We can make no assurance as to the liquidity of or the existence of trading markets for any of the securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Certain persons participating in this offering may engage in
overallotment, stabilizing transactions, short covering transactions, and penalty bids in accordance with rules and regulations
under the Exchange Act. Overallotment involves sales in excess of the offering size, which create a short position. Stabilizing
transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum.
Short covering transactions involve purchase of the securities in the open market after the distribution is completed to cover
short positions. Penalty bids permit the underwriters to reclaim a selling concession from a dealer when the securities originally
sold by the dealer are purchased in a covering transaction to cover short positions. Those activities may cause the price of the
securities to be higher than it would otherwise be. If commenced, the underwriters may discontinue any of the activities at any
time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>DESCRIPTION OF ORDINARY SHARES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our authorized share capital consists of 50,000,000 ordinary
shares of a nominal value of NIS 0.1 each. All outstanding ordinary shares are validly issued, fully paid and non-assessable. The
rights attached to the ordinary shares are as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Dividend rights.</I><B> </B>Holders of our ordinary shares
are entitled to the full amount of any cash or share dividend subsequently declared. The board of directors may declare interim
dividends and propose the final dividend with respect to any fiscal year only out of the retained earnings, in accordance with
the provisions of the Israeli Companies Law. All unclaimed dividends or other monies payable in respect of a share may be invested
or otherwise made use of by the Board of Directors for our benefit until claimed. Any dividend unclaimed after a period of three
years from the date of declaration of such dividend will be forfeited and will revert to us; provided, however, that the Board
of Directors may, at its discretion, cause us to pay any such dividend to a person who would have been entitled thereto had the
same not reverted to us. We are not obligated to pay interest or linkage differentials on an unclaimed dividend.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Voting rights.</I> Holders of ordinary shares have one vote
for each ordinary share held on all matters submitted to a vote of shareholders. Such voting rights may be affected by the grant
of any special voting rights to the holders of a class of shares with preferential rights that may be authorized in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The quorum required at any meeting of shareholders consists
of at least two shareholders present in person or represented<B> </B>by proxy who hold or represent, in the aggregate, at least
one-third (33%) of the voting rights in the company. A meeting adjourned for lack of a quorum is generally adjourned to the same
day in the following week at the same time and place or any time and place as the directors designate in a notice to the shareholders.
At the reconvened meeting, the required quorum consists of any two members present in person or by proxy.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Under our articles of association, all resolutions require approval
of no less than a majority of the voting rights represented at the meeting in person or by proxy and voting thereon.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Pursuant to our articles of association, our directors (except
external directors) are elected at our annual general meeting of shareholders by a vote of the holders of a majority of the voting
power represented and voting at such meeting and hold office until the next annual general meeting of shareholders and until their
successors have been elected. All the members of our Board of Directors (except the external directors) may be reelected upon completion
of their term of office. Asseco, our controlling shareholder, and Formula Systems, our parent company, will be able to exercise
control over the election of our directors (subject to a special majority required for the election of external directors).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Rights to share in the company&rsquo;s profits.</I> Our shareholders
have the right to share in our profits distributed as a dividend and any other permitted distribution.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Rights to share in surplus in the event of liquidation.</I>
In the event of our liquidation, after satisfaction of liabilities to creditors, our assets will be distributed to the holders
of ordinary shares in proportion to the nominal value of their holdings. This right may be affected by the grant of preferential
dividend or distribution rights to the holders of a class of shares with preferential rights that may be authorized in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Liability to capital calls by the company. </I>Under our
memorandum of association and the Israeli Companies Law, the liability of our shareholders to provide us with additional funds
is limited to the par value of the shares held by them.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Changing Rights Attached to Shares</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">According to our articles of association, the rights attached
to any class of shares may be modified or abrogated by us, subject to the consent in writing of, or sanction of a resolution passed
by, the holders of a majority of the issued shares of such class at a separate general meeting of the holders of the shares of
such class.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Annual and Extraordinary Meetings</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Under the Israeli Companies Law a company must convene an annual
meeting of shareholders at least once every calendar year and within fifteen months of the last annual meeting. Depending on the
matter to be voted upon, notice of at least 21 days or 35 days prior to the date of the meeting is required. Our board of directors
may, in its discretion, convene additional meetings as &ldquo;extraordinary general meetings.&rdquo; In addition, the board must
convene an extraordinary general meeting upon the demand of two of the directors, 25% of the nominated directors, one or more shareholders
holding at least 5% of the outstanding share capital and at least 1% of the voting power in the company, or one or more shareholders
having at least 5% of the voting power in the company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Limitations on the Rights to Own Securities
in Our Company</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Neither our memorandum of association or our articles of association
nor the laws of the State of Israel restrict in any way the ownership or voting of shares by non-residents, except with respect
to subjects of countries which are in a state of war with Israel.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Provisions Restricting Change in Control
of Our Company</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Israeli Companies Law requires that mergers between Israeli
companies be approved by the board of directors and general meeting of shareholders of both parties to the transaction. The approval
of the board of directors of both companies is subject to such boards&rsquo; confirmation that there is no reasonable doubt that
following the merger the surviving company will be able to fulfill its obligations towards its creditors. Each company must notify
its creditors about the contemplated merger. Under the Israeli Companies Law, our articles of association are deemed to include
a requirement that such merger be approved by an extraordinary resolution of the shareholders, as explained above. The approval
of the merger by the general meetings of shareholders of the companies is also subject to additional approval requirements as specified
in the Israeli Companies Law and regulations promulgated thereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Disclosure of Shareholders Ownership</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Israeli Securities Law and the regulations promulgated thereunder
require that a company whose shares are traded on a stock exchange in Israel, as in the case of our company, report the share ownership
of its interested parties. An interested party is defined under the Israeli Securities Law as any one of the following: (i) a person
holding 5% or more of the company&rsquo;s issued capital stock or voting power, or who is entitled to appoint one or more of the
company&rsquo;s directors or its general manager; or (ii) any person acting as a director or general manager of the company; or
(iii) any company, in which any of the above persons either holds 25% or more of its capital stock or voting power or is entitled
to appoint 25% or more of its directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Changes in Our Capital</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Changes in our capital are subject to the approval of the shareholders
by a majority of the votes of shareholders present at the meeting, in person or by proxy, and voting on the matter.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The transfer agent and registrar for the ordinary shares is
American Stock Transfer &amp; Trust Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>DESCRIPTION OF SUBSCRIPTION RIGHTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We may issue subscription rights to purchase our ordinary shares.
These subscription rights may be issued independently or together with any other security offered hereby and may or may not be
transferable by the shareholder receiving the subscription rights in such offering. In connection with any offering of subscription
rights, we may enter into a standby arrangement with one or more underwriters or other purchasers pursuant to which the underwriters
or other purchasers may be required to purchase any securities remaining unsubscribed for after such offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The prospectus supplement relating to any subscription rights
we offer, if any, will, to the extent applicable, include specific terms relating to the offering, including some or all of the
following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 24px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>the price, if any, for the subscription rights;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 24px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>the exercise price payable for each ordinary share upon the exercise of the subscription rights;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 24px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>the number of subscription rights to be issued to each shareholder;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 24px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>the number and terms of the shares ordinary shares which may be purchased per each subscription right;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 24px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>the extent to which the subscription rights are transferable;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 24px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>any other terms of the subscription rights, including the terms, procedures and limitations relating to the exchange and exercise of the subscription rights;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 24px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>the date on which the right to exercise the subscription rights shall commence, and the date on which the subscription rights shall expire;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 24px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>the extent to which the subscription rights may include an over-subscription privilege with respect to unsubscribed securities; and</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 24px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>if applicable, the material terms of any standby underwriting or purchase arrangement which may be entered into by us in connection with the offering of subscription rights.</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The description in the applicable prospectus supplement of any
subscription rights we offer will not necessarily be complete and will be qualified in its entirety by reference to the applicable
subscription right agreement, which will be filed with the SEC if we offer subscription rights. For more information on how you
can obtain copies of the applicable subscription right agreement if we offer subscription rights, see the sections entitled &ldquo;Where
You Can Find More Information&rdquo; and &ldquo;Incorporation of Information by Reference&rdquo;. We urge you to read the applicable
subscription right agreement and any applicable prospectus supplement in their entirety.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 35.3pt"><B>DESCRIPTION OF WARRANTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 35.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We may issue warrants to purchase ordinary
shares and/or debt securities in one or more series together with other securities or separately, as described in the applicable
prospectus supplement. Below is a description of certain general terms and provisions of the warrants that we may offer. Particular
terms of the warrants will be described in the warrant agreements and the prospectus supplement for the warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The applicable prospectus supplement will
contain, where applicable, the following terms of and other information relating to the warrants:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>the specific designation and aggregate number of, and the price at which we will issue, the warrants;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>the currency or currency units in which the offering price, if any, and the exercise price are payable;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>the designation, amount, and terms of the securities purchasable upon exercise of the warrants;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>if applicable, the exercise price for ordinary shares and the number of ordinary shares to be received upon exercise of the
warrants;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>if applicable, the exercise price for our debt securities, the amount of debt securities to be received upon exercise, and
a description of that series of debt securities;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>the date on which the right to exercise the warrants will begin and the date on which that right will expire or, if you may
not continuously exercise the warrants throughout that period, the specific date or dates on which you may exercise the warrants;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>whether the warrants will be issued in fully registered form or bearer form, in definitive or global form, or in any combination
of these forms, although, in any case, the form of a warrant included in a unit will correspond to the form of the unit and of
any security included in that unit;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>any applicable material U.S. federal income tax consequences;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>the identity of the warrant agent for the warrants and of any other depositaries, execution or paying agents, transfer agents,
registrars, or other agents;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>the proposed listing, if any, of the warrants or any securities purchasable upon exercise of the warrants on any securities
exchange;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>if applicable, the date from and after which the warrants and the ordinary shares and/or debt securities will be separately
transferable;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>if applicable, the minimum or maximum amount of the warrants that may be exercised at any other time;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>information with respect to book-entry procedures, if any;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>the anti-dilution provisions of the warrants, if any;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>any redemption or call provisions;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>whether the warrants are to be sold separately or with other securities as parts of units; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>any additional terms of the warrants, including terms, procedures, and limitations relating to the exchange and exercise of
the warrants.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.3pt; text-align: center"><B>DESCRIPTION OF DEBT SECURITIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.3pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We may issue debt securities together with
other securities or separately, as described in the applicable prospectus supplement, under an indenture to be entered into between
Magic Software Enterprises Ltd. and the trustee identified in the applicable prospectus supplement. The terms of the debt securities
will include those stated in the indenture and those made part of the indenture by reference to the Trust Indenture Act of 1939,
as in effect on the date of the indenture. The indenture will be subject to and governed by the terms of the Trust Indenture Act
of 1939.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We may issue the debt securities in one
or more series with the same or various maturities, at par, at a premium, or at a discount. We will describe the particular terms
of each series of debt securities in a prospectus supplement relating to that series, which we will file with the SEC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The prospectus supplement will set forth,
to the extent required, the following terms of the debt securities in respect of which the prospectus supplement is delivered:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>the title of the series;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>the aggregate principal amount;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>the issue price or prices, expressed as a percentage of the aggregate principal amount of the debt securities;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>any limit on the aggregate principal amount;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>the date or dates on which principal is payable;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>the interest rate or rates (which may be fixed or variable) or, if applicable, the method used to determine such rate or rates;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>the date or dates from which interest, if any, will be payable and any regular record date for the interest payable;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>the place or places where principal and, if applicable, premium and interest, is payable;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>the terms and conditions upon which we may, or the holders may require us to, redeem or repurchase the debt securities;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>the denominations in which such debt securities may be issuable, if other than denomination of $1,000, or any integral multiple
of that number;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>whether the debt securities are to be issuable in the form of certificated debt securities or global debt securities;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>the portion of principal amount that will be payable upon declaration of acceleration of the maturity date if other than the
principal amount of the debt securities;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>the currency of denomination;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>the designation of the currency, currencies or currency units in which payment of principal and, if applicable, premium and
interest, will be made;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>if payments of principal and, if applicable, premium or interest, on the debt securities are to be made in one or more currencies
or currency units other than the currency of denominations, the manner in which exchange rate with respect to such payments will
be determined;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>if amounts of principal and, if applicable, premium and interest may be determined by reference to an index based on a currency
or currencies, or by reference to a commodity, commodity index, stock exchange index, or financial index, then the manner in which
such amounts will be determined;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>the provisions, if any, relating to any collateral provided for such debt securities;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>any events of default;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>the terms and conditions, if any, for conversion into or exchange for ordinary shares;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>any depositaries, interest rate calculation agents, exchange rate calculation agents, or other agents; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>the terms and conditions, if any, upon which the debt securities shall be subordinated in right of payment to other indebtedness
of Magic Software Enterprises Ltd.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">One or more debt securities may be sold
at a substantial discount below their stated principal amount. We may also issue debt securities in bearer form, with or without
coupons. If we issue discount debt securities or debt securities in bearer form, we will describe material U.S. federal income
tax considerations and other material special considerations which apply to these debt securities in the applicable prospectus
supplement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We may issue debt securities denominated
in or payable in a foreign currency or currencies or a foreign currency unit or units. If we do, we will describe the restrictions,
elections, and general tax considerations relating to the debt securities and the foreign currency or currencies or foreign currency
unit or units in the applicable prospectus supplement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The debt securities of a series may be issued
in whole or in part in the form of one or more global securities that will be deposited with, or on behalf of, a depositary identified
in the prospectus supplement. Global securities will be issued in registered form and in either temporary or definitive form. Unless
and until it is exchanged in whole or in part for individual debt securities, a global security may not be transferred except as
a whole by the depositary for such global security to a nominee of such depositary or by a nominee of such depositary to such depositary
or another nominee of such depositary or by such depositary or any such nominee to a successor of such depositary or a nominee
of such successor. The specific terms of the depositary arrangement with respect to any debt securities of a series and the rights
of and limitations upon owners of beneficial interests in a global security will be described in the applicable prospectus supplement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>DESCRIPTION OF UNITS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We may, from time to time, issue units comprised of one or more
of the other securities that may be offered under this prospectus, in any combination.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Each unit will be issued so that the holder of the unit is also
the holder of each security included in the unit. Thus, the holder of a unit will have the rights and obligations of a holder of
each included security. The unit agreement under which a unit is issued may provide that the securities included in the unit may
not be held or transferred separately at any time, or at any time before a specified date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Any applicable prospectus supplement will describe:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 24px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>the material terms of the units and of the securities comprising the units, including whether and under what circumstances those securities may be held or transferred separately;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 24px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>any material provisions relating to the issuance, payment, settlement, transfer or exchange of the units or of the securities comprising the units; and</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 24px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>any material provisions of the governing unit agreement that differ from those described above.</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The description in the applicable prospectus supplement of any
units we offer will not necessarily be complete and will be qualified in its entirety by reference to the applicable unit agreement,
which will be filed with the SEC if we offer units. For more information on how you can obtain copies of the applicable unit agreement
if we offer warrants, see the sections entitled &ldquo;Where You Can Find More Information&rdquo; and &ldquo;Incorporation of Information
by Reference&rdquo;. We urge you to read the applicable unit agreement and any applicable prospectus supplement in their entirety.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>FOREIGN EXCHANGE CONTROLS AND OTHER LIMITATIONS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Israeli law and regulations do not impose any material foreign
exchange restrictions on non-Israeli holders of our ordinary shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Non-residents of Israel who purchase our ordinary shares will
be able to convert dividends, if any, thereon, and any amounts payable upon our dissolution, liquidation or winding up, as well
as the proceeds of any sale in Israel of our ordinary shares to an Israeli resident, into freely repatriable dollars, at the exchange
rate prevailing at the time of conversion, provided that the Israeli income tax has been withheld (or paid) with respect to such
amounts or an exemption has been obtained.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>AUTHORIZED REPRESENTATIVE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our authorized representative in the United States for this
offering as required pursuant to Section&nbsp;6(a) of the Securities Act of 1933, is Magic Software Enterprises Inc., located at
23046 Avenida de la Carlota, Laguna Hills, CA 92653.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>OFFERING EXPENSES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The following is a statement of expenses
in connection with the distribution of the securities registered. All amounts shown are estimates except the SEC registration fee.
The estimates do not include expenses related to offerings of particular securities. Each prospectus supplement describing an offering
of securities will reflect the estimated expenses related to the offering of securities under that prospectus supplement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 85%; text-align: left">Securities and Exchange Commission registration fee</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">8,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Legal fees and expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Accountants&rsquo; fees and expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">27,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Printing fees</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 1pt">Miscellaneous</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">5,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt">Total</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">51,000</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>LEGAL MATTERS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> The validity of the securities offered in this prospectus
will be passed upon for us by Amit Birk, Adv., our Israeli counsel, and by Carter Ledyard &amp; Milburn LLP, our U.S. counsel. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>EXPERTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our consolidated financial statements as of December 31, 2011
and 2012, and for each of the three years ended December 31, 2012 included in our Annual Report on Form 20-F, have been audited
by Kost Forer Gabbay &amp; Kasierer, a member of Ernst &amp; Young Global, an independent registered public accounting firm, as
set forth in their report thereon and incorporated herein. Such consolidated financial statements are incorporated herein by reference
in reliance upon such report given on the authority of such firm as experts in accounting and auditing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> The financial statements of our subsidiary, Magic Software
Enterprises U.K. Limited, as of December 31, 2011 and 2012, and for each of the three years ended December 31, 2012 included in
our Annual Report on Form 20-F, have been audited by Levy Cohen &amp; Co., an independent registered public accounting firm, as
set forth in their report thereon and incorporated herein. Such financial statements are incorporated herein by reference in reliance
upon such report given on the authority of such firm as experts in accounting and auditing. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> The financial statements of our subsidiary, Hermes Logistics
Technologies Limited, as of December 31, 2011 and 2012, and for each of the three years ended December 31, 2012 included in our
Annual Report on Form 20-F, have been audited by Levy Cohen &amp; Co., an independent registered public accounting firm, as set
forth in their report thereon and incorporated herein. Such financial statements are incorporated herein by reference in reliance
upon such report given on the authority of such firm as experts in accounting and auditing. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> The financial statements of our subsidiary, Magic Software
Japan K.K., as of December 31, 2011 and 2012, and for each of the three years ended December 31, 2012 included in our Annual Report
on Form 20-F, have been audited by KDA Audit Corporation, an independent registered public accounting firm, as set forth in their
report thereon and incorporated herein. Such financial statements are incorporated herein by reference in reliance upon such report
given on the authority of such firm as experts in accounting and auditing. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> The financial statements of our subsidiary, Magic Benelux
B.V., as of December 31, 2010, and for the year ended December 31, 2010 included in our Annual Report on Form 20-F, have been
audited by Verstegen Accountants en Adviseurs, an independent registered public accounting firm, as set forth in their report
thereon and incorporated herein. Such financial statements are incorporated herein by reference in reliance upon such report given
on the authority of such firm as experts in accounting and auditing. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> The financial statements of our subsidiary, Magic (Onyx)
Magyarorsz&aacute;g Szoftverh&aacute;z K ft., as of December 31, 2010, and for the year ended December 31, 2010 included in our
Annual Report on Form 20-F, have been audited by Maria N&eacute;gyessy, Registered Auditors, an independent registered public
accounting firm, as set forth in their report thereon and incorporated herein. Such financial statements are incorporated herein
by reference in reliance upon such report given on the authority of such firm as experts in accounting and auditing. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>WHERE YOU CAN FIND MORE INFORMATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">This prospectus is a part of a registration statement on Form
F-3 that we filed on November 8, 2013, with the SEC under the Securities Act of 1933. We refer you to this registration statement,
for further information about us and the securities offered hereby.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We file annual and special reports and other information with
the Securities and Exchange Commission (Commission File Number 000-19415). These filings contain important information that does
not appear in this prospectus. For further information about us, you may read and copy these filings at the SEC&rsquo;s Public
Reference Room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549-0102. You may obtain information on the operation of the
Public Reference Room by calling the SEC at 1-800-SEC-0330, and may obtain copies of our filings from the public reference room
by calling (202) 551-8090. Our SEC filings are also available on the SEC Internet site at http://www.sec.gov, which contains periodic
reports and other information regarding issuers that file electronically.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INCORPORATION OF CERTAIN INFORMATION
BY REFERENCE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We file annual and special reports and other information with
the Commission (File Number 000-19415). These filings contain important information which does not appear in this prospectus. The
Commission allows us to &ldquo;incorporate by reference&rdquo; information into this prospectus, which means that we can disclose
important information to you by referring you to other documents which we have filed or will file with the Commission. We are incorporating
by reference in this prospectus the documents listed below and all amendments or supplements we may file to such documents, as
well as any future filings we may make with the Commission on Form 20-F under the Exchange Act before the time that all of the
securities offered by this prospectus have been sold or de-registered.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Annual Report on Form 20-F for the fiscal year
ended December 31, 2012, as amended;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &bull;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
Reports on Form 6-K furnished to the SEC on May 1, 2013, May 7, 2013, June 12, 2013, July 8, 2013, July 23, 2013, July 30, 2013,
August 5, 2013, August 7, 2013, August 12, 2013, September 3, 2013, September 10, 2013, September 17, 2013, October 1, 2013, October
7, 2013, October 8, 2013, October 15, 2013, October 22, 2013, October 24, 2013, October 31, 2013, November 6, 2013, November 8,
2013, November 13, 2013 and December 12, 2013. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B> &nbsp; </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In addition, we may incorporate by reference into this prospectus
our reports on Form 6-K filed after the date of this prospectus (and before the time that all of the securities offered by this
prospectus have been sold or de-registered) if we identify in the report that it is being incorporated by reference in this prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Certain statements in and portions of this prospectus update
and replace information in the above listed documents incorporated by reference. Likewise, statements in or portions of a future
document incorporated by reference in this prospectus may update and replace statements in and portions of this prospectus or the
above listed documents.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We will provide you without charge, upon
your written or oral request, a copy of any of the documents incorporated by reference in this prospectus, other than exhibits
to such documents which are not specifically incorporated by reference into such documents. Please direct your written or telephone
requests to Magic Software Enterprises Ltd., 5 Haplada Street, Or-Yehuda 60218, Israel, Attn: Amit Birk, telephone number +972-3-538-9292.
You may also obtain information about us by visiting our website at <U>www.magicsoftware.com</U>. Information contained in our
website is not part of this prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We are an Israeli company and are a &ldquo;foreign private issuer&rdquo;
as defined in Rule 3b-4 under the Securities Exchange Act of 1934, or Exchange Act. As a result, (i) our proxy solicitations are
not subject to the disclosure and procedural requirements of Regulation 14A under the Exchange Act, (ii) transactions in our equity
securities by our officers, directors and principal shareholders are exempt from Section 16 of the Exchange Act; and (iii) we are
not required under the Exchange Act to file periodic reports and financial statements as frequently or as promptly as U.S. companies
whose securities are registered under the Exchange Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We make available to our shareholders an
annual report containing financial statements that have been examined and reported on, with an opinion expressed by, an independent
registered public accounting firm. We have been making all required filings with the Commission electronically, and these filings
are available via the Internet at the Commission&rsquo;s website at http://www.sec.gov. In addition, since we are also listed on
the Tel Aviv Stock Exchange we submit copies of all our filings with the Commission to the Israeli Securities Authority and the
Tel Aviv Stock Exchange. Such copies can be retrieved electronically through the Tel Aviv Stock Exchange&rsquo;s internet messaging
system (www.maya.tase.co.il) and, in addition through the MAGNA distribution site of the Israeli Securities Authority (www.magna.isa.gov.il).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>ENFORCEABILITY OF CIVIL LIABILITIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Service of process upon us and upon our
directors and officers and the Israeli experts named in this prospectus, most of whom reside outside the United States, may be
difficult to obtain within the United States. Furthermore, because substantially all of our assets and substantially all of our
directors and officers are located outside the United States, any judgment obtained in the United States against us or any of our
directors and officers may not be collectible within the United States.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">There is doubt as to the enforceability of civil liabilities
under the Securities Act and the Exchange Act in original actions instituted in Israel. However, subject to specified time limitations,
an Israeli court may declare a foreign civil judgment enforceable if it finds that:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left">&bull;</TD><TD STYLE="text-align: justify">the judgment was rendered by a court which was, according
to the laws of the state of the court, competent to render the judgment,</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left">&bull;</TD><TD STYLE="text-align: justify">the judgment is no longer appealable,</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">&bull;</TD><TD>the obligation imposed by the judgment is enforceable according to the rules relating to the enforceability of judgments in
Israel and the substance of the judgment is not contrary to public policy, and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left">&bull;</TD><TD STYLE="text-align: justify">the judgment is executory in the state in which it was
given.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Even if the above conditions are satisfied, an Israeli court
will not enforce a foreign judgment if it was given in a state whose laws do not provide for the enforcement of judgments of Israeli
courts (subject to exceptional cases) or if its enforcement is likely to prejudice the sovereignty or security of the State of
Israel.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">An Israeli court also will not declare a foreign judgment enforceable
if:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left">&bull;</TD><TD STYLE="text-align: justify">the judgment was obtained by fraud,</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left">&bull;</TD><TD STYLE="text-align: justify">there was no due process,</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">&bull;</TD><TD>the judgment was rendered by a court not competent to render it according to the laws of private international law in Israel,</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">&bull;</TD><TD>the judgment is at variance with another judgment that was given in the same matter between the same parties and which is still
valid, or</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">&bull;</TD><TD>at the time the action was brought in the foreign court a suit in the same matter and between the same parties was pending
before a court or tribunal in Israel.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">If a foreign judgment is enforced by an
Israeli court, it generally will be payable in Israeli currency. Judgment creditors must bear the risk of unfavorable exchange
rates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="text-transform: uppercase"><B>MAGIC
SOFTWARE ENTERPRISES LTD.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><IMG SRC="tlogo.jpg" ALT=""></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: #A2238E"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>$60,000,000</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Ordinary Shares</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Subscription Rights</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Warrants</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Debt Securities</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Units</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>PROSPECTUS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<!-- Field: Rule-Page --><DIV ALIGN="CENTER" STYLE="margin-top: 0; margin-bottom: 0"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 25%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">You should rely only on the information
incorporated by reference or provided in this prospectus and in any accompanying prospectus supplement. We have not authorized
anyone to provide you with different information. We are not making any offer to sell or buy any of the securities in any state
where the offer is not permitted. You should not assume that the information in this prospectus is accurate as of any date other
than the date that appears below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"> December [&nbsp;&nbsp;&nbsp;&nbsp;],
2013 </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PART II</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INFORMATION NOT REQUIRED IN PROSPECTUS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Item 15. Indemnification of Directors and Officers.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Israeli Companies Law and our Articles of Association authorize
us, subject to the receipt of requisite corporate approvals, to indemnify and exempt our directors and officers, subject to certain
conditions and limitations. &nbsp;In the past, our Audit Committee, board of directors and shareholders approved the issuance of
indemnification and exculpation letters to all our directors and officers (including directors and officers who could be deemed
to be controlling shareholders, within the meaning of the Israeli Companies Law). In light of the recent amendments to the Israeli
Securities Law, our shareholders approved at our 2011 annual general meeting an amendment to our form of indemnification and exculpation
letter to ensure that our directors and officers (including any director and officer who may be deemed to be a controlling shareholder,
within the meaning of the Israeli Companies Law) are afforded protection to the fullest extent permitted by law as currently in
effect. Under the approved form of indemnification and exculpation letter, the total amount of indemnification allowed may not
exceed an amount equal to 25% of our shareholders&rsquo; equity in the aggregate, calculated with respect to each of our directors
and officers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Israeli Companies Law provides that a company cannot exculpate
an office holder from liability with respect to a breach of his duty of loyalty, but may, if permitted by its articles of association,
exculpate or indemnify in advance an office holder from his liability to the company, in whole or in part, with respect to a breach
of his or her duty of care. However, a company may not exculpate in advance a director from his or her liability to the company
with respect to a breach of his duty of care in the event of distributions. The Israeli Companies Law provides that a company may,
if permitted by its articles of association, indemnify an office holder for acts or omissions performed by the office holder in
such capacity for:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>A financial liability imposed on the office holder in favor of another person by any judgment, including a settlement or an arbitrator&rsquo;s award approved by a court;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>Reasonable litigation expenses, including attorney&rsquo;s fees, actually incurred by the office holder as a result of an investigation or proceeding instituted against him or her by a competent authority, provided that such investigation or proceeding concluded without the filing of an indictment against the office holder or the imposition of any financial liability in lieu of criminal proceedings, or concluded without the filing of an indictment against the office holder and a financial liability was imposed on the officer holder in lieu of criminal proceedings with respect to a criminal offense that does not require proof of criminal intent; and</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>Reasonable litigation expenses, including attorneys&rsquo; fees, incurred by such office holder or which were imposed on him by a court, in proceedings the company instituted against the office holder or that were instituted on the company&rsquo;s behalf or by another person, or in a criminal charge from which the office holder was acquitted, or in a criminal proceeding in which the office holder was convicted of a crime which does not require proof of criminal intent.</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In accordance with the Israeli Companies Law, a company&rsquo;s
articles of association may permit the company to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>Undertake in advance to indemnify an office holder, except that with respect to a financial liability imposed on the office holder by any judgment, settlement or court-approved arbitration award, the undertaking must be limited to types of occurrences, which, in the opinion of the company&rsquo;s board of directors, are, at the time of the undertaking, foreseeable due to the company&rsquo;s activities and to an amount or standard that the board of directors has determined is reasonable under the circumstances; and</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>Retroactively indemnify an office holder of the company.</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Insurance for Office Holders</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Israeli Companies Law provides that a company may, if permitted
by its articles of association, insure an office holder for acts or omissions performed by the office holder in such capacity for:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>A breach of his or her duty of care to the company or to another person;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>A breach of his or her duty of loyalty to the company, provided that the office holder acted in good faith and had reasonable cause to assume that his act would not prejudice the company&rsquo;s interests; and</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>A financial liability imposed upon the office holder in favor of another person as a result of an action which was performed by that office holder.</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our articles of association allow us to insure our office holders
to the fullest extent permitted by law.&nbsp;&nbsp;Until its expiration in December 2011, we maintained a directors&rsquo; and
officers&rsquo; liability insurance policy with liability coverage of up to $20 million per claim and in the aggregate (including
legal costs incurred world-wide) of an annual premium of $39,000.&nbsp;&nbsp;At our 2011 annual general meeting, our shareholders
approved a framework agreement of terms and conditions for the renewal, extension or replacement, from time to time, for a period
of up to three years from December 14, 2011, of our directors&rsquo; and officers&rsquo; liability insurance policy for all directors
and officers of the company and its subsidiaries, who may serve from time to time (including a director who may be deemed a controlling
shareholder, within the meaning of the Israeli Companies Law), according to which (i) the annual aggregate premium of the New Policy
may not exceed 25% of the previous year&rsquo;s aggregate premium; (ii) the coverage limit per claim and in the aggregate under
the New Policy may not exceed an amount representing an increase of 25% in any year, as compared to the previous year&rsquo;s aggregate
coverage limit; and (iii) the terms of any new policy must be identical with respect to all of our officers and directors (including
officers and directors who may be deemed controlling shareholders, within the meaning of the Israeli Companies Law).&nbsp;&nbsp;No
further approval by our shareholders will be required in connection with any renewal, extension or purchase of any new policy entered
into in compliance with the foregoing terms and conditions of the framework agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Limitations on Exculpation, Insurance and Indemnification</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Israeli Companies Law provides that neither a provision
of the articles of association permitting the company to enter into a contract to insure the liability of an office holder, nor
a provision in the articles of association or a resolution of the board of directors permitting the indemnification of an office
holder, nor a provision in the articles of association exempting an office holder from duty to the company shall be valid, where
such insurance, indemnification or exemption relates to any of the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>a breach by the office holder of his duty of loyalty, except with respect to insurance coverage or indemnification if the office holder acted in good faith and had reasonable grounds to assume that the act would not prejudice the company;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>a breach by the office holder of his duty of care if such breach was committed intentionally or recklessly, unless the breach was committed only negligently;</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>any act or omission committed with intent to derive an unlawful personal gain; and</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
    <td style="width: 48px">&nbsp;</td>
    <td style="width: 24px"><font style="font-family: Symbol">&middot;</font></td>
    <td>any fine or forfeiture imposed on the office holder.</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In addition, pursuant to the Israeli Companies Law, exemption
of, procurement of insurance coverage for, an undertaking to indemnify or indemnification of an office holder must be approved
by the audit committee and the board of directors and, if such office holder is a director or a controlling shareholder or a relative
of the controlling shareholder, also by the shareholders general meeting. A special majority at the general meeting is required
if a controlling shareholder is interested in such transaction as an office holder or as a relative of an office holder, as described
above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Our articles of association allow us to insure, indemnify and
exempt our office holders to the fullest extent permitted by law, subject to the provisions of the Israeli Companies Law. We currently
maintain a directors&rsquo; and officers&rsquo; liability insurance policy with a per-claim and aggregate coverage limit of $20
million, including legal costs incurred world-wide.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Item 16. Exhibits.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The index to exhibits appears below on the page immediately
following the signature pages of this Registration Statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Item 17. Undertakings.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned registrant hereby undertakes:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
to include any prospectus required by Section&nbsp;10(a)(3) of the Securities Act of 1933 (the &quot;Securities
Act&quot;);</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or the most recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement. Notwithstanding
the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would
not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the &lsquo;&lsquo;Calculation
of Registration Fee&rsquo;&rsquo; table in the effective registration statement; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to include any material information with respect to
the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in this
Registration Statement;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>provided, however,</I> that paragraphs (i),&nbsp;(ii) and
(iii)&nbsp;above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained
in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section&nbsp;13 or Section&nbsp;15(d)
of the Securities Exchange Act of 1934 (the &quot;Exchange Act&quot;) that are incorporated by reference in this Registration Statement
or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the Registration Statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;that, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the termination of the offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;that, for the purpose of determining any liability under
the Securities Act to any purchaser:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;each prospectus filed by the registrant pursuant to Rule&nbsp;424(b)(3)
shall be deemed to be a part of the registration statement as of the date the filed prospectus was deemed part of and included
in the registration statement; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;each prospectus required to be filed pursuant to Rule&nbsp;424(b)(2),
(b)(5) or (b)(7) as part of a registration statement in reliance on Rule&nbsp;430B relating to an offering made pursuant to Rule&nbsp;415(a)(1)(i),
(vii)&nbsp;or (x)&nbsp;for the purpose of providing the information required by Section&nbsp;10(a) of the Securities Act shall
be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first
used after </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As
provided in Rule&nbsp;430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date
shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement
to which the prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering
thereof; <I>provided, however, </I>that no statement made in a registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus
that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date,
supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement
or made in any such document immediately prior to such effective date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;that, for the purpose of determining liability of a registrant
under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes
that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the
underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means
of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to
offer or sell such securities to such purchaser:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any preliminary prospectus or prospectus of the undersigned
registrant to the offering required to be filed pursuant to Rule&nbsp;424;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any free writing prospectus relating to the offering
prepared by or on behalf of the undersigned registrant or used or referred to by an undersigned registrant;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the portion of any other free writing prospectus relating
to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of
the undersigned registrant; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any other communication that is an offer in the offering
made by the undersigned registrant to the purchaser.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, each filing of the registrant's annual report pursuant to Section&nbsp;13(a)
or Section&nbsp;15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan&rsquo;s annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in this Registration Statement shall be deemed
to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions
referred to in Item 15, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(4)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule&nbsp;430A and contained in a form of prospectus filed by the registrant pursuant
to Rule&nbsp;424(b)(1) or (4)&nbsp;or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement
as of the time it was declared effective.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(5)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned registrant hereby undertakes that, for
the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">registration statement relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(6)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned registrant hereby undertakes to file
an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of section 310 of the
Trust Indenture Act (&quot;Act&quot;) in accordance with the rules and regulations prescribed by the Commission under section 305(b)2
of the Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>SIGNATURES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Pursuant to the requirements of the Securities Act, the
Registrant certifies that it has reasonable grounds to believe that it complies with all of the requirements for filing on Form
F-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized,
in Or Yehuda, Israel, on December 19, 2013. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> &nbsp; </P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%"> &nbsp; </TD>
    <TD STYLE="width: 5%"> By: </TD>
    <TD STYLE="width: 45%; border-bottom: Black 1pt solid"> /s/Guy Bernstein </TD></TR>
<TR STYLE="vertical-align: top">
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> Guy Bernstein </TD></TR>
<TR STYLE="vertical-align: top">
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> Chief Executive Officer </TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> Pursuant to the requirements of the Securities Act, this
registration statement has been signed below by the following persons in the capacities indicated on December 19, 2013. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: top">
    <TD STYLE="vertical-align: bottom; text-align: left; border-bottom: Black 1pt solid; width: 30%"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> Signature </B></FONT></td>
    <TD STYLE="width: 15%; vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></td>
    <TD STYLE="vertical-align: bottom; text-align: left; border-bottom: Black 1pt solid; width: 55%"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> Title </B></FONT></td></tr>
<TR STYLE="vertical-align: top">
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<tr style="vertical-align: top">
    <TD STYLE="vertical-align: bottom; text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif"> /s/Guy
    Bernstein </FONT></td>
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></td>
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Chief Executive
    Officer (Principal Executive Officer) and Director </FONT></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Guy Bernstein </FONT></td>
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></td>
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></td></tr>
<TR STYLE="vertical-align: top">
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<tr style="vertical-align: top">
    <TD STYLE="vertical-align: bottom; text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif"> /s/
    Asaf Berenstin </FONT></td>
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></td>
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Chief Financial
    Officer (Principal Accounting and Financial Officer) </FONT></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Asaf Berenstin </FONT></td>
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></td>
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></td></tr>
<TR STYLE="vertical-align: top">
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<tr style="vertical-align: top">
    <TD STYLE="vertical-align: bottom; text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif"> /s/
    Naamit Salomon </FONT></td>
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></td>
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Director </FONT></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Naamit Salomon </FONT></td>
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></td>
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></td></tr>
<TR STYLE="vertical-align: top">
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<tr style="vertical-align: top">
    <TD STYLE="vertical-align: bottom; text-align: left; border-bottom: Black 1pt solid; padding-left: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif"> * </FONT></td>
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></td>
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Director </FONT></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Yehezkel
    Zeira </FONT></td>
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></td>
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></td></tr>
<TR STYLE="vertical-align: top">
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<tr style="vertical-align: top">
    <TD STYLE="vertical-align: bottom; text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif"> /s/
    Itiel Efrat </FONT></td>
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></td>
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Director </FONT></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Itiel Efrat </FONT></td>
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></td>
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></td></tr>
<TR STYLE="vertical-align: top">
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<tr style="vertical-align: top">
    <TD STYLE="vertical-align: bottom; text-align: left; border-bottom: Black 1pt solid; padding-left: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif"> * </FONT></td>
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></td>
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Director </FONT></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Elan Penn </FONT></td>
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></td>
    <TD STYLE="vertical-align: bottom; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></td></tr>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2"><FONT STYLE="font-size: 10pt">MAGIC SOFTWARE ENTERPRISES, <FONT STYLE="text-transform: uppercase">Inc.</FONT></FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">Authorized Representative in the United States</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 5%"> &nbsp; </TD>
    <TD STYLE="width: 45%"> &nbsp; </TD>
    <TD STYLE="width: 5%"> &nbsp; </TD>
    <TD STYLE="width: 45%"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt"> By: </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt"> /s/Regev Yativ </FONT></TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt"> Name: </FONT> &nbsp; </TD>
    <TD><FONT STYLE="font-size: 10pt"><B> Regev Yativ </B></FONT></TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt"> Title: </FONT></TD>
    <TD><FONT STYLE="font-size: 10pt"><B> President </B></FONT></TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top">
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt"> By: </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt"> /s/Amit Birk </FONT></TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt"> Name: </FONT> &nbsp; </TD>
    <TD><FONT STYLE="font-size: 10pt"><B> Amit Birk </B></FONT></TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top">
    <TD> &nbsp; </TD>
    <TD><FONT STYLE="font-size: 10pt; text-transform: uppercase"> a </FONT> <FONT STYLE="font-size: 10pt">ttorney-in-Fact*</FONT> </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD></TR>
</TABLE>


<P STYLE="margin: 0">&nbsp;</P>


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<tr style="vertical-align: top">
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"><B>Exhibit No.</B></td>
    <TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid"><b>Description of Exhibit</b></td></tr>
<tr style="vertical-align: top">
    <TD STYLE="width: 6%">&nbsp;</TD>
    <TD STYLE="text-align: left; width: 6%">1.1</td>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 86%">Form of Underwriting Agreement or Agency Agreement (1) </td></tr>
<tr style="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">4.1</td>
    <TD>&nbsp;</TD>
    <TD>Memorandum of Association of the Registrant, as amended (2)</td></tr>
<tr style="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">4.2</td>
    <TD>&nbsp;</TD>
    <TD>Specimen of Ordinary Share Certificate (3) </td></tr>
<tr style="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">4.3</td>
    <TD>&nbsp;</TD>
    <TD>Form of Subscription Rights Agreement (including form of Subscription Right Certificate) (4)</td></tr>
<tr style="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">4.4</td>
    <TD>&nbsp;</TD>
    <TD>Form of Warrant (5)</td></tr>
<tr style="vertical-align: top">
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> 4.5 </td>
    <TD> &nbsp; </TD>
    <TD> Indenture relating to the issuances of debentures, notes, bonds or other evidences of indebtedness* </td></tr>
<tr style="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">4.6</td>
    <TD>&nbsp;</TD>
    <TD>Form of debt security (1)</td></tr>
<tr style="vertical-align: top">
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> 5.1 </td>
    <TD> &nbsp; </TD>
    <TD> Opinion of Amit Birk, Advocate </td></tr>
<tr style="vertical-align: top">
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> 5.2 </td>
    <TD> &nbsp; </TD>
    <TD> Opinion of Carter Ledyard &amp; Milburn LLP </td></tr>
<tr style="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">23.1</td>
    <TD>&nbsp;</TD>
    <TD>Consent of Kost Forer Gabbay &amp; Kasierer, a member of Ernst &amp; Young Global</td></tr>
<tr style="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">23.2</td>
    <TD>&nbsp;</TD>
    <TD>Consent of Levy Cohen &amp; Co., Chartered Accountants (relating to Magic Software Enterprises (UK) Limited)</td></tr>
<tr style="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">23.3</td>
    <TD>&nbsp;</TD>
    <TD>Consent of Levy Cohen &amp; Co., Chartered Accountants (relating to Hermes Logistics Technologies Limited)</td></tr>
<tr style="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">23.4</td>
    <TD>&nbsp;</TD>
    <TD>Consent of KDA Audit Corporation (relating to Magic Software Japan K.K.)</td></tr>
<tr style="vertical-align: top">
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> 23.5 </td>
    <TD> &nbsp; </TD>
    <TD> Consent of Verstegen accountants en adviseurs (relating to Magic Benelux B.V.) </td></tr>
<tr style="vertical-align: top">
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> 23.6 </td>
    <TD> &nbsp; </TD>
    <TD> Consent of M&aacute;ria N&eacute;gyessy Registered Auditors (relating to Magic (Onyx) Magyarorsz&aacute;g Szoftverh&aacute;z
    Kft.) </td></tr>
<tr style="vertical-align: top">
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> 23.7 </td>
    <TD> &nbsp; </TD>
    <TD> Consent of Amit Birk, Advocate (contained in Exhibit 5.1) </td></tr>
<tr style="vertical-align: top">
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> 23.8 </td>
    <TD> &nbsp; </TD>
    <TD> Consent of Carter Ledyard &amp; Milburn LLP (contained in Exhibit 5.2) </td></tr>
<tr style="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">24.1</td>
    <TD>&nbsp;</TD>
    <TD>Power of Attorney (included in the signature page to the Registration Statement)</td></tr>
<tr style="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left">25.1</td>
    <TD>&nbsp;</TD>
    <TD>Statement of Eligibility of Trustee under Indenture (6)</td></tr>
</table>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Incorporated by reference, if necessary, to a corresponding
exhibit to a Current Report on Form 6-K in connection with an offering of securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Previously filed as an Item to the registrant&rsquo;s
Form 6-K for the month of December 2011, filed on December 7, 2011, and incorporated herein by reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(3)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Previously filed as Exhibit 4.1 to the registrant&rsquo;s
registration statement on Form F-1, registration number 33-41486, and incorporated herein by reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(4)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If applicable, to be filed by amendment or incorporated
by reference pursuant to a report on Form 6-K.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(5)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Previously filed as an Item to the registrant&rsquo;s
Form 6-K for the month of December 2010, filed on December 23, 2010, and incorporated herein by reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(6)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Where applicable, to be incorporated by reference to
a subsequent filing in accordance with Section&nbsp;305(b)(2) of the Trust Indenture Act of 1939, as amended.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> *&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Previously
filed. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<DOCUMENT>
<TYPE>EX-5.1
<SEQUENCE>2
<FILENAME>v363364_ex5-1.htm
<DESCRIPTION>EXHIBIT 5.1
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
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<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: right; text-indent: -0.5in"><B>EXHIBIT
5.1</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: center; text-indent: -0.5in"><B>[LETTER
HEAD OF AMIT BIRK-LAW OFFICE]</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: center; text-indent: -0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.5in">December 19, 2013</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.5in">Magic Software Enterprises Ltd.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.5in">Or Yehuda 60218,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.5in">Israel</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0.5in">Re: Registration Statement on
Form F-3 of Magic Software Enterprises Ltd.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.5in">Ladies and Gentlemen:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">I have acted as counsel to Magic Software
Enterprises Ltd., a company organized under the laws of the State of Israel, (the &ldquo;Registrant&rdquo;) in connection with
the Registration Statement on Form F-3 (the &ldquo;Registration Statement&rdquo;) to be filed by the Registrant with the Securities
and Exchange Commission under the Securities Act of 1933, as amended (the &ldquo;Securities Act&rdquo;). The Registration Statement
relates to the registration of up to $60,000,000 aggregate amount of any or all of the following securities (the &ldquo;Securities&rdquo;):
(i) ordinary shares, par value NIS&nbsp;.1 per share, of the Registrant (Ordinary Shares&rdquo;); (ii) debt securities (&ldquo;Debt
Securities&rdquo;); (iii) warrants to purchase debt or equity securities (&ldquo;Warrants&rdquo;); (iv) subscription rights to
purchase Ordinary Shares (&ldquo;Subscription Rights&rdquo;); and (v) units comprised of one or more of the Ordinary Shares, Debt
Securities Warrants and&nbsp;&nbsp;Subscription Rights in any combination ( &ldquo;Units&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">As counsel to the Registrant in connection with the registering
of the Securities pursuant to the Registration Statement, I have examined such corporate records, certificates and other documents,
and such questions of law, as I have considered necessary or appropriate for the purpose of my opinion.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Upon the basis of such examination, I am of the opinion that:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When the issuance of the Ordinary Shares has been duly authorized
by appropriate corporate action, and the Ordinary Shares have been duly issued, sold and delivered in accordance with the applicable
definitive purchase agreement or other similar agreement approved by, or on behalf of, the Registrant &rsquo;s Board of Directors,
the Ordinary Shares will be legally issued, fully paid and nonassessable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When the issuance of the Warrants has been duly authorized
by appropriate corporate action, and the Warrants have been duly executed and delivered against payment therefore, pursuant to
a warrant agreement or agreements duly authorized, executed and delivered by the Registrant and a warrant agent, the Warrants will
be valid and binding obligations of the Registrant, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting creditors&rsquo; rights and to general equity principles.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">a.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When the issuance of the Ordinary Shares
issuable upon the exercise of any Warrants has been duly authorized by appropriate corporate action, and the Ordinary Shares have
been duly issued, and the Registrant has received any additional consideration which is payable upon the exercise of the Warrants,
the Ordinary Shares will be legally issued, fully paid and nonassessable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">b.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When the issuance of the Debt Securities
issuable upon the exercise of any Warrants has been duly authorized by appropriate corporate action, and the Debt Securities, have
been duly completed, executed, authenticated and delivered in accordance with the indenture to be filed as an exhibit to the Registration
Statement (the &ldquo;Indenture&rdquo;), and the Registrant has received any additional consideration which is payable upon the
exercise of the Warrants, the Debt Securities will be valid and binding obligations of the Registrant, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors&rsquo;
rights and to general equity principles.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When the issuance of the Debt Securities has been duly authorized
by appropriate corporate action and the Debt Securities have been duly completed, executed, authenticated and delivered in accordance
with the Indenture and sold pursuant to the applicable definitive purchase agreement or similar agreement approved by, or on behalf
of, the Board of Directors of the Registrant, the Debt Securities will be valid and binding obligations of the Registrant, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors&rsquo; rights and to general equity principles.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With respect to the Subscription Rights, assuming the
(a) taking of all necessary corporate action to authorize and approve the issuance and terms of any Subscription Rights, the terms
of the offering thereof and related matters and (b) due execution, authentication, issuance and delivery of such Subscription Rights
upon payment of the consideration therefor provided for in the applicable definitive purchase, underwriting or similar agreement
approved by the board of directors and otherwise in accordance with the provisions of the applicable Subscription Rights Agreement,
such Subscription Rights will constitute valid and legally binding obligations of the Registrant, enforceable against the Registrant
in accordance with their terms.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With respect to the Units, assuming the (a) taking of
all necessary corporate action to authorize and approve the issuance and the terms of the Units and any Securities which are components
of the Units, the terms of the offering thereof and related matters and (b) due execution, countersignature (where applicable),
authentication, issuance and delivery of the Units and the Securities that are components of such Units in each case upon the payment
of the consideration therefor provided for in the applicable definitive purchase, underwriting or similar agreement approved by
the board of directors, and otherwise in accordance with the provisions of the applicable (i) Indenture, in the case of Debt Securities,
(ii) Subscription Rights Agreement, in the case Subscription Rights and (iii) Warrant Agreement, in the case of Warrants, such
Units will be validly issued and will entitle the holders thereof to the rights specified therefor.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the laws of Israel, the designation of the law
of the State of&nbsp;&nbsp;New York to apply to the Indentures, the Warrant Agreement and the Subscription Rights Agreement will
be binding upon the Registrant, and, if properly brought to the attention of the court or administrative body in accordance with
the laws of Israel, would be enforceable in any judicial or administrative proceeding in Israel subject to the existence of special
circumstances or considerations, and subject generally to the discretion of the Israeli court ruling on the matter.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Carter Ledyard &amp; Milburn LLP may rely upon this opinion
for the purpose of rendering their opinion dated December 19, 2013, with respect to certain matters concerning the Securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The opinion expressed herein is limited to Israeli law, and
I do not express any opinion as to the laws of any other jurisdiction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">I consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to my name under the headings &ldquo;Legal Matters&rdquo; and &ldquo;Enforceability
of Civil Liabilities&rdquo; in the Prospectus which is a part of the Registration Statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%">&nbsp;</TD>
    <TD STYLE="width: 50%">Very truly yours,</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>/s/Amit Birk</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Amit Birk</TD></TR>
</TABLE>
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<DESCRIPTION>EXHIBIT 5.2
<TEXT>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: right; text-indent: -0.5in"><B>EXHIBIT
5.2</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: center; text-indent: -0.5in">[CLM Letterhead]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">December 19, 2013</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="text-transform: uppercase"><B><U>VIA e-mail</U></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Magic Software Enterprises Ltd.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Or Yehuda 60218</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Israel</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.25in"></TD><TD STYLE="width: 0.5in">Re:</TD><TD>Registration Statement on Form F-3<BR>
 <U>of Magic Software Enterprises Ltd.</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Ladies and Gentlemen:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We have acted as United States counsel to
Magic Software Enterprises Ltd., a company organized under the laws of the State of Israel, (the &ldquo;Company&rdquo;) in connection
with the Registration Statement on Form F-3 (the &ldquo;Registration Statement&rdquo;) filed by the Company with the Securities
and Exchange Commission under the Securities Act of 1933, as amended (the &ldquo;Securities Act&rdquo;). The Registration Statement
relates to the registration of up to $60,000,000 aggregate amount of the following securities of the Company: (i) ordinary shares,
nominal value NIS 0.1 per share (the &ldquo;Ordinary Shares&rdquo;); (ii) debt securities (the &ldquo;Debt Securities&rdquo;);
(iii) warrants to purchase Ordinary Shares and/or Debt Securities (the &ldquo;Warrants&rdquo;); (iv) subscription rights distributed
to holders of the Company's securities to acquire Ordinary Shares ( the &ldquo; Subscription Rights&rdquo;); and (v) units comprised
of one or more of the Ordinary Shares, Debt Securities, Warrants and Subscription Rights in any combination (the &ldquo;Units,&rdquo;
and together with the Ordinary Shares, Debt Securities, Subscription Rights and Warrants, the &ldquo;Securities&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The Debt Securities will be issued under
an indenture, substantially in the form of the exhibit to the Registration Statement (the &ldquo;Indenture&rdquo;) between the
Company and a trustee to be named in the applicable Prospectus Supplement (each, a &ldquo;Trustee&rdquo;). The Subscription Rights
will be issued pursuant to a subscription rights agreement (the &ldquo;Subscription Rights Agreement&rdquo;) between the Company
and a subscription agent (the &ldquo;Subscription Agent&rdquo;). The Warrants will be issued under a warrant agreement (the &ldquo;Warrant
Agreement&rdquo;) between the Company and a warrant agent (the &ldquo;Warrant Agent&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In connection herewith, we have examined
and relied without investigation as to matters of fact upon the Registration Statement and the exhibits thereto, including the
form of Indenture, and such certificates, statements and results of inquiries of public officials and officers and representatives
of the Company and originals or copies, certified or otherwise identified to our satisfaction, of such other documents, corporate
records, certificates and instruments as we have deemed necessary or appropriate to enable us to render the opinions expressed
herein. We have also relied, with the permission of Amit Birk Adv., upon his legal opinion letter to the Company dated December
19, 2013 with respect to certain matters concerning the Company and the Securities. We have assumed the genuineness of all signatures
on all documents examined by us, the legal competence and capacity of natural persons, the authenticity of documents submitted
to us as originals, and the conformity with authentic original documents of all documents submitted to us as copies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We also have assumed that: (1) at the time
of execution, authentication, issuance and delivery of the Debt Securities, the related Indenture will be the valid and legally
binding obligation of the applicable Trustee, enforceable against such party in accordance with its terms; (2) at the time of execution,
issuance and delivery of the Subscription Rights, the Subscription Rights Agreement will be the valid and legally binding obligation
of the Subscription Rights Agent, enforceable against such party in accordance with its terms; and (3) at the time of execution,
issuance and delivery of any Warrants, the related Warrant Agreement will be the valid and legally binding obligation of the Warrant
Agent, enforceable against such party in accordance with its terms.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We have assumed further that: (1) at the
time of execution, issuance and delivery of the Debt Securities, the related Indenture will have been duly authorized, executed
and delivered by the Company and the applicable Trustee; (2) at the time of execution, issuance and delivery of the Subscription
Rights, the Subscription Rights Agreement will have been duly authorized, executed and delivered by the Company and the Subscription
Agent; (3) at the time of execution, issuance and delivery of any Warrants, the related Warrant Agreement will have been duly authorized,
executed and delivered by the Company and the Warrant Agent; and (4) at the time of the issuance and sale of any of the Securities,
the terms of the Securities, and their issuance and sale, will have been established so as not to violate any applicable law or
result in a default under or breach of any agreement or instrument binding upon the Company and so as to comply with any requirement
or restriction imposed by any court or governmental body having jurisdiction over the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Based upon the foregoing, in reliance thereon
and subject to the assumptions, comments, qualifications, limitations and exceptions stated herein and the effectiveness of the
Registration Statement under the Securities Act, we are of the opinion that:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">1. With respect to the Debt Securities,
assuming the (a) taking of all necessary corporate action to authorize and approve the issuance and terms of any Debt Securities,
the terms of the offering thereof and related matters and (b) due execution, authentication, issuance and delivery of such Debt
Securities upon payment of the consideration therefor provided for in the applicable definitive purchase, underwriting or similar
agreement approved by the board of directors and otherwise in accordance with the provisions of the applicable Indenture, such
Debt Securities will constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance
with their terms.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">2. With respect to the Subscription Rights,
assuming the (a) taking of all necessary corporate action to authorize and approve the issuance and terms of any Subscription Rights,
the terms of the offering thereof and related matters and (b) due execution, authentication, issuance and delivery of such Subscription
Rights upon payment of the consideration therefor provided for in the applicable definitive purchase, underwriting or similar agreement
approved by the board of directors and otherwise in accordance with the provisions of the applicable Subscription Rights Agreement,
such Subscription Rights will constitute valid and legally binding obligations of the Company, enforceable against the Company
in accordance with their terms.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">3. With respect to the Warrants, assuming
the (a) taking of all necessary corporate action to authorize and approve the issuance and terms of any Warrants, the terms of
the offering thereof and related matters and (b) due execution, authentication, issuance and delivery of such Warrants upon payment
of the consideration therefor provided for in the applicable definitive purchase, underwriting or similar agreement approved by
the board of directors and otherwise in accordance with the provisions of the applicable Warrant Agreement, such Warrants will
constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Our opinions herein reflect only the application
of applicable laws of the State of New York and the federal laws of the United States of America and no opinion is expressed with
respect to the laws of any other jurisdiction or any effect which such laws may have on the opinions expressed herein. This opinion
is limited to the matters stated herein, and no opinion is implied or may be inferred beyond the matters expressly stated herein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The opinions set forth above are subject,
as to the enforcement of remedies, to bankruptcy, insolvency, reorganization, moratorium and similar laws affecting the rights
and remedies of creditors generally and to the effect of general principles of equity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">This opinion is given as of the date hereof,
and we assume no obligation to advise you after the date hereof of facts or circumstances that come to our attention or changes
in law that occur which could affect the opinions contained herein. This letter is being rendered solely for the benefit of the
Company in connection with the matters addressed herein. This opinion may not be furnished to or relied upon by any person or entity
for any purpose without our prior written consent.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We consent to the filing of this opinion
as an exhibit to the Registration Statement and to the reference to us under the caption &ldquo;Legal Matters&rdquo; in the Prospectus.
In giving such consent, we do not thereby concede that we are within the category of persons whose consent is required under Section
7 of the Act or the Rules and Regulations of the Commission thereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%">&nbsp;</TD>
    <TD STYLE="width: 50%"><FONT STYLE="font-size: 10pt">Very truly yours,</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-size: 10pt">/s/Carter Ledyard &amp; Milburn LLP</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt">&nbsp;</P>


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<DESCRIPTION>EXHIBIT 23.1
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: right; text-indent: -0.5in"><B>EXHIBIT
23.1</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: center; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CONSENT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We consent to the reference to our firm under the caption &ldquo;Experts&rdquo;
in the Registration Statement on Form F-3/A and related Prospectus of Magic Software Enterprises Ltd. and to the incorporation
by reference therein of our reports dated April 24, 2013, with respect to the consolidated financial statements of Magic Software
Enterprises Ltd. for the year ended December 31, 2012 and the effectiveness of internal control over financial reporting of Magic
Software Enterprises Ltd., included in its Annual Report on Form 20-F for the year ended December 31, 2012, filed with the Securities
and Exchange Commission.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%">&nbsp;</TD>
    <TD STYLE="width: 50%">/s/Kost Forer Gabbay &amp; Kasierer</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>KOST, FORER, GABBAY &amp; KASIERER</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>A member of Ernst &amp; Young Global</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Tel-Aviv, Israel</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">December 18, 2013</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>


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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.2
<SEQUENCE>5
<FILENAME>v363364_ex23-2.htm
<DESCRIPTION>EXHIBIT 23.2
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: right; text-indent: -0.5in"><B>EXHIBIT
23.2</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CONSENT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We consent to the reference to our firm
under the caption &ldquo;Experts&rdquo; in the Registration Statement on Form F-3 and related Prospectus of Magic Software Enterprises
Ltd. of our report dated January 30, 2013, with respect to the financial statements of Magic Software Enterprises UK Limited as
of December 31, 2012 which report appears in the Annual Report on Form 20-F of Magic Software Enterprises Ltd. for the year ended
December 31, 2012, filed with the Securities and Exchange Commission.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Yours sincerely,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">LEVY COHEN &amp; CO.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">/s/Levy Cohen &amp; Co.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Registered Auditors and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Certified Public Accountants</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">December 17, 2013</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>



</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.3
<SEQUENCE>6
<FILENAME>v363364_ex23-3.htm
<DESCRIPTION>EXHIBIT 23.3
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>EXHIBIT 23.3</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>CONSENT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We consent to the reference to our firm under the caption &ldquo;Experts&rdquo;
in the Registration Statement on Form F-3 and related Prospectus of Magic Software Enterprises Ltd. of our report dated February
8, 2013, with respect to the financial statements of Hermes Logistics Technologies Limited as of December 31, 2012 which report
appears in the Annual Report on Form 20-F of Magic Software Enterprises Ltd. for the year ended December 31, 2012, filed with the
Securities and Exchange Commission.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Yours sincerely,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">LEVY COHEN &amp; CO.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">/s/Levy Cohen &amp; Co.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Registered Auditors and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Certified Public Accountants</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 50%; text-align: right">December&nbsp;&nbsp;17, 2013</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>



</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.4
<SEQUENCE>7
<FILENAME>v363364_ex23-4.htm
<DESCRIPTION>EXHIBIT 23.4
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>EXHIBIT 23.4</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CONSENT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We consent to the reference to our firm under the caption &ldquo;Experts&rdquo;
in the Registration Statement on Form F-3 and related Prospectus of Magic Software Enterprises Ltd. of our report dated January
30, 2013, with respect to the financial statements of Magic Software Japan K.K. as of December 31, 2012 which report appears in
the Annual Report on Form 20-F of Magic Software Enterprises Ltd. for the year ended December 31, 2012, filed with the Securities
and Exchange Commission.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 90%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 60%">&nbsp;</TD>
    <TD STYLE="width: 40%; text-align: right">/s/KDA Audit Corporation</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">KDA Audit Corporation</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">Registered Auditors</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Tokyo, Japan</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">December 17, 2013</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>


</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.5
<SEQUENCE>8
<FILENAME>v363364_ex23-5.htm
<DESCRIPTION>EXHIBIT 23.5
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>EXHIBIT 23.5</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CONSENT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">To the board of Management of</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Magic Benelux B.V.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">5 Haplada Street</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Or Yehuda</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">ISRAEL</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Dordrecht, December 17, 2013</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Re: KH/VK/NS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Dear Sirs,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We consent to the reference to our firm under the caption &ldquo;Experts&rdquo;
in the Registration Statement on Form F-3 and related Prospectus of Magic Software Enterprises Ltd. of our report dated January
28, 2011, with respect to the financial statements of Magic Benelux B.V. as of December 31, 2010, which report appears in the Annual
Report on Form 20-F of Magic Software Enterprises Ltd. for the year ended December 31, 2012, filed with the Securities and Exchange
Commission.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">On behalf of Verstegen accountants en adviseurs B.V.,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">/s/ Drs. L.K Hogendoorn RA MGA</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Drs. L.K Hogendoorn RA MGA</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

</BODY>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.6
<SEQUENCE>9
<FILENAME>v363364_ex23-6.htm
<DESCRIPTION>EXHIBIT 23.6
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>EXHIBIT 23.6</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>CONSENT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We consent to the reference to our firm under the caption &ldquo;Experts&rdquo;
in the Registration Statement on Form F-3 and related Prospectus of Magic Software Enterprises Ltd. of our report dated January
28, 2011, with respect to the financial statements of Magic (Onyx) Magyarorsz&aacute;g Szoftverh&aacute;z Kft. as of December 31,
2010, which report appears in the Annual Report on Form 20-F of Magic Software Enterprises Ltd. for the year ended December 31,
2012, filed with the Securities and Exchange Commission.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 50%; text-align: justify">/s/M&aacute;ria N&eacute;gyessy</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">M&aacute;ria N&eacute;gyessy</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Registered Auditors</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Budapest</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">December 17, 2013</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>





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</DOCUMENT>
<DOCUMENT>
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<SEQUENCE>10
<FILENAME>tlogo.jpg
<DESCRIPTION>GRAPHIC
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end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
